By Candice Choi, AP
NEW YORK — Chase is rolling out a credit card embedded with a “smart” chip technology that reduces fraud and is already widely used outside the United States.
The British Airways co-branded card, available Monday, is intended to appeal to frequent travelers who may experience hiccups with U.S. credit cards overseas.
The U.S. is the only developed country still primarily using credit and debit cards with magnetic strips. The rest of the industrialized world has already switched, or is transitioning, to the chip-based cards.
Chip-based cards aren’t swiped like cards with magnetic strips. Instead, users insert the cards into a slot then punch in a PIN code to finalize a transaction. Although card terminals overseas also have a slot where magnetic strip cards can be swiped, cashiers in less-traveled areas are sometimes confused by how to process such transactions.
Naney Pandit, general manager of Chase’s card services, said not having a chip-based card was becoming a hassle for customers in recent years, as Europe and Asia adopt cards with the chip technology.
“What used to be a trickle a few years ago has become a frequent point of irritation,” she said.
Chip technology nevertheless remains a rarity across the country. Magnetic strip technology is so entrenched that the transition to chip-based cards poses logistic difficulties. Stores have little reason to install terminals for smart cards because banks didn’t issue them. Banks don’t issue the cards because stores wouldn’t accept them.
But increasing concerns over fraud could mean chip-based cards soon become more common. Visa this year announced new policies that will give U.S. banks, payment processors and stores incentives to adopt the smart cards, starting in 2015.