Smart cards still provide a magnetic strip that makes them compatible with older terminals but they also have an embdedded microprocessor that provides the smart technology. Smart card technology has been introduced to prevent fraud in over 22 countries including most of Europe, Brazil, Mexico and Japan and more countries are adopting the technology as time progresses. It is anticipated that the next two years will see China, India and most of Latin America embrace this new, high security feature.
The oncard microprocessor allows more data to be stored on the card rather than relying upon database access. The new smart card technology is favoured by the police and government as it makes it so much more difficult to clone credit cards and commit card fraud.
The new technology isn’t too much of an issue when making purchases in stores or paying restaurant bills as most of these merchant terminals still rely on magnetic strips. However, there are an increasing number of automated terminals, at ticket kiosks and gas pumps, that require the use of a new smart card. Americans who don’t have cards with the new smart card technology would not be able to make use of these new facilties.
Although the rest of the world is quickly adopting the new, high security technology the American banking industry has no immediate plans introduce the new cards. They say that card fraud has not been as big an issue in the United States as it is in other countries.
Another key reason for the delay in adoption of this technology is of course the cost. The estimated cost of introduction has been around $5.5 billion to introduce the required technology most of which would be spent on the new terminals needed by merchants.
So it looks like American tourists in Europe and elsewhere will need to make certain they have cash in their pockets rather than rely on their credit cards.
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One thing you can be certain of when travelling is the need for adequate and appropriate travel insurance. If you are over 64 you should be looking at Senior travel insurance and if you have a medical condition you would be wise to consider pre existing medical travel insurance.
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