Chip-and-PIN and chip-and-signature are two different types of EMV chip cards used by credit cards that help cardholders make transactions more securely. The main difference between the two is that chip-and-PIN cards require a personal identification number for purchase verification while chip-and-signature cards require a signature.
They also differ in their level of security and where they are primarily used. Chip-and-signature cards are the main types of chip cards in the U.S., and chip-and-PIN cards are used abroad.
Chip-and-PIN vs. Chip-and-Signature
Chip-and-PIN | Chip-and-Signature |
More secure than chip-and-signature cards, since fraudsters will still need your PIN to use the card | More secure than a magnetic stripe card, but fraudsters can replicate your signature |
Verification done with a 4-digit PIN | Verification done with a signature |
Accepted everywhere | Accepted everywhere |
Mainly used overseas | Mainly used in the U.S. |
Disadvantages of Using Chip-and-Signature Cards Abroad
The majority of smartcards in the United States are chip-and-signature credit cards (which, like all chip-based cards in the U.S., still have magnetic stripes for now). Credit card marketers are intentionally vague about the specific chip-based technology they use, but the truth is that chip-and-signature is generally viewed as a half-measure that doesn’t solve the biggest problems that international travelers have.
May Not Work at Unmanned Kiosks
Although most chip-and-signature credit cards can be used overseas, there may be a few cards that are not accepted at certain unattended automated kiosks that you may find in European train stations or certain small restaurants and parking garages.
While such kiosks are certainly the exception rather than the rule, experts says there is very little acceptance disparity between chip-and-PIN credit cards and chip-and-signature cards, that will likely offer little solace if you find yourself stranded in a train station late at night with no means to buy a ticket to your destination.
Confusion Among International Merchants
In rare occasions, there are also logistical issues involved with trying to use chip-and-signature credit cards at places that are supposed to accept them. Poor merchant training about when a PIN is truly required for payment processing has been known to create confusion even though VISA and Mastercard require that all attended point-of-sale machines be equipped to accept chip-and-signature transactions and when a chip-and-signature card is inserted into a payment terminal, the terminal will generally recognize that no PIN is required and will instead print out a receipt saying “verified by signature.”
Even if you have a firm grasp on the language, which most tourists do not, trying to convince a foreign merchant who is accustomed to only processing payments via PIN that your card does not require a PIN could prove pretty frustrating.
To be fair, the credit card infrastructure in a lot of countries – namely Spain, Portugal, Italy, Germany, Turkey, Mexico, Australia, New Zealand, China, India, Russia, and most of Southeast Asia – is based on chip-and-signature or online PIN technology. But given that the chip-and-signature cards being offered by U.S. issuers don’t come with corresponding PINs for even online verification, you might still run into problems.
Why the U.S. Mainly Has Chip-and-Signature Credit Cards
Even though chip-and-PIN credit cards provide more protection against fraud, U.S. credit card issuers are primarily offering chip-and-signature credit cards to their customers. Below, we’ll explain why that is and why U.S. consumers may not see a major shift toward chip-and-PIN credit cards anytime soon.
International Acceptance
Chip-and-signature cards are easier to use internationally than magnetic stripe cards. However, practical experience and consumer feedback indicate that you can still use magnetic stripe credit cards pretty much anywhere that will accept a chip-and-signature card. And the few places where magnetic stripe cards don’t work (i.e. certain unattended kiosks), chip-and-signature cards don’t tend to work either.
Marketing
Credit card companies can market chip-based credit cards as having special new features and thereby charge more as well as attract new customers, even though the specific technology they’re advertising doesn’t have much practical benefit.
Reduced Liability
While banks have long been held accountable for fraud, Visa/Mastercard policies designed to increase the prevalence of chip cards shifted liability to merchants who have not equipped their stores to accept chip cards.
Logistical Issues
Certain transitional, regulatory and logistical issues help explain why banks have not simply adopted chip-and-PIN credit cards. According to Jack Jania, Senior Vice President for Gemalto, Inc., a Netherlands-based smartcard manufacturer, it depends on the infrastructure needed to support PIN management. Debit card PINs, he says, are handled in a back-office fashion and are stored in a centralized location. With chip-and-PIN credit cards, though, the PIN is essentially coded into the card’s computer chip. You can change the PIN at an ATM, but that obviously requires an ATM that can modify a chip card.
Chip-and-signature “is a half-step,” said Jania. “The reason it is a half-step is it’s going to take some time to upgrade all the ATMs.” Right now, most ATMs in the U.S. can read chip cards, but you may not be able to change your PIN using an ATM. For some issuers, you can only change your credit card PIN by contacting the issuer over the phone or visiting a local bank branch.
U.S. Chip-and-PIN Credit Cards
Some of the best travel credit cards are chip-and-PIN. Below, we’ll list some of the top options by category.
For more options, check out WalletHub’s latest picks for the best chip-and-PIN credit cards.
Contactless Credit Cards: No PIN or Signature Needed
Contactless credit cards are cards that you can just tap at a payment terminal to complete a purchase. A short-range radio frequency antenna allows cardholders to pay by hovering their card over a payment terminal instead of dipping or swiping their card. A signature or a PIN will not be required for this type of transaction.
Contactless cards use the same security standards for transactions as EMV chip credit cards, creating a unique, one-time-use code for each transaction instead of sending your personal information. This makes them more secure than magnetic stripe cards without a chip.
Bottom Line
Ultimately, there are a couple key points that future international travelers can take from all of this:
Even though chip-and-signature credit cards are more widely available worldwide, chip-and-PIN credit cards may still be needed for purchases made at some unattended kiosks.
We can expect to see more and more chip-based cards and contactless cards being offered by U.S. banks as the country continues to upgrade its credit card technology.
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