If you've traveled abroad any time over the last several years, you likely experienced a rude shock. Although withdrawing money from ATMs may have been easy, your credit card probably didn't work at most restaurants, stores and tourist attractions outside of the United States.
As many Americans discover the hard way:
- MasterCard isn't always for everything else.
- Visa isn't necessarily everywhere you want to be.
Why American Plastic Doesn’t Work Abroad
Most major retail markets around the world now use EMVs as their official card payment standard. These chip-enabled credit cards offer much greater protection against in-store fraud.
The U.S. only recently adopted the EMV standard — although compliance isn't 100 percent mandatory. In October 2015, new liability rules went into effect, placing pressure on merchants and card issuers that don't begin using EMVs.
In Europe and most parts of Asia, however, the penalty for not adopting EMVs is much stronger. So much so that many merchants won't accept traditional magstripe cards — even if their terminals are capable of reading these older forms of plastic.
Some international merchants will accept non-EMV plastic; but in order to be sure, you would need to call ahead at every hotel, restaurant and shop in advance to verify this fact.
Does this mean that as an American, it's no longer practical to travel abroad for spring break or summer vacation?
EMVs Are Becoming Mainstream in the United States
Thanks to these liability rules, EMV adoption is becoming more widespread throughout the U.S. In fact, there is a very good chance that you already have a chip-enabled card in your wallet — without even knowing it. Roughly 70 percent of stateside card issuers have sent EMVs to their customers — and that percentage will only increase in the coming year.
To check if you are already carrying EMV plastic, look for an embedded chip on the front or back of your card. It should be about the size of a micro SIM card.
If you do have a chip-enabled card, you should be good to go; although we recommend testing your card before traveling. Not all U.S. merchants are EMV-ready yet, but most of the big-name retailers are. Be sure to practice on an EMV terminal.
If you don't have an EMV card yet, call your bank right away and order one.
Why EMVs Plus Cash Is Your Best Bet
As you travel, EMVs should cover you in most situations. However, even with chip-enabled plastic in your pocket, you won't be covered for all international encounters.
Some services only accept credit cards issued by local banks. In France, for example, certain gas stations and tollbooths won't be able to read your American EMV. Therefore, you'll need to carry a little extra cash everywhere you go. Just be on the lookout for pickpockets.
Enjoy your travels, and if you have any additional questions about EMV credit cards, contact us today for a free consultation.