The Chip Card Disaster

Credit cards have never been terribly secure. I've eaten at a restaurant on a Friday night and by Sunday realized I left my card there and the waiter had taken it to the bar district that night. From the charges, I'd say he bought a round for everyone.

These one-off fraud cases aren't the real problem though. The problem has been the large retailers who store customer credit card numbers by the millions with less-than-ideal security. The hackers break-in and everyone needs a new card.

So the credit card industry decided a more secure card was the answer. Today's chip cards no longer provide your number to the retailer (despite it still being written in large, friendly numbers on the front of your card). Instead, the chip card has encrypted data on it that is transmitted to the vendor's credit card processor. The vendor themselves never gets your card number.

Almost a year ago, here in the US, we were supposed to be switching to these new chip cards that have been in use in Europe for several years. While I'm seeing more and more of them these days, about half are like the one above, with the chip reader taped off and a message telling us to swipe instead. If you wonder why, you'll know once you try using one.

When they do work, the user experience is nothing short of awful. First, why do I have to insert this card and then wait? Who thought changing the way people have been passing their card info (swiping) was a good idea? Swiping wasn't a great idea to begin with since it's not obvious which way you should hold the card when swiping it. We eventually learn of course but it's not obvious.

Quite often I'm stuck in line behind some poor shmuck who is just trying to pay for his turkey sandwich and can't figure out which of the four possible ways this card could go in to the reader is the right one. Swiping a card takes half a second. These chip cards take something like 10 seconds to authorize. I could literally type in the number, digit by digit, faster. And when you get the card in right, when finally unlock that achievement, you're reward is a loud alarm sound  suggesting to everyone around you  that your card has been declined. What panel of experts thought this was an improvement?

It's my guess that most of the chip card-enabled readers actually work but the retail staff are so tired of the problems they create, they just pretend they don't work.

Let's compare this with ApplePay, Apple's iPhone-based payment system. I pull my iPhone from my pocket, position it near the card reader and rest my thumb on the Home button. My screen comes on showing my default card and a little animation appears indicating that it's detected my valid fingerprint. It ends with a friendly checkmark on the screen and a happy bling! sound. The entire process takes 1 second tops. It's simple, faster than getting my card from my wallet and just as secure as a chip card. I presume Android Pay is similar though I have no experience with it.

This chip card transition is like a Greek trajedy. Almost every aspect of it that could be done poorly, was. Fortunately, more and more retailers are taking Apple Pay and Android Pay. If you work for one that doesn't, please urge your employer to do so post haste. Paying for my turkey sandwich should never be the most complicated part of the transaction.