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IN.Y. TimesI Two CUs ahead of big banks on smart cards
NEW YORK (4/14/11)--Two credit unions are well ahead of the big banks on providing smart cards, solving a problem many travelers face with U.S.-based credit and debit cards not working overseas, said The New York Times Tuesday. U.S. cards rely on older magnetic-stripe technology. Many countries, especially in Europe, use chip technology. That means many vendors overseas can't process Americans' magnetic stripe cards. "So if, like most Americans, you bank at a financial institution in the U.S. your card could potentially cause you some problems overseas--unless, that is, you happen to be a member of a small credit union," said the Times. It noted that the State Employees' CU (SECU) of Raleigh, N.C., just began offering debit cards with the E.M.V. (Europay, MasterCard, Visa) chips to members. Leanne Phelps, senior vice president of card services at SECU, told the Times the credit union had heard about problems with acceptance of cards from members traveling internationally. Although the problem was sporadic and affected a small percentage of the credit union's debit transactions, the credit union made the switch after learning that Canada and Mexico were moving to chip cards. Another credit union, the United Nations FCU, based in New York, has offered credit cards with chips for about a year, said the article. The Times questioned why credit unions could offer the latest card technology while big banks don't. Experts told the newspaper that big banks are still waiting for widespread adoption of the chip technology and that the only country not advanced in the technology is the U.S. Also banks haven't felt a serious financial hit from crime to justify the switch to the more fraud-resistant chip cards, the article said. To read the article, use the link.
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