The P.A.

A weekly address from Patrick Adams,
President of St. Louis Community Credit Union

To Swipe or Not to Swipe

On August 8th, 2016, posted in: Uncategorized by

hand with chip card“Don’t swipe, insert.”

“Oops, sorry.”

That’s the interaction that takes place between consumers and cashiers at the 25% of all retailers who have borne the expense to get those fancy little card readers. The other three out of four merchants (without the state-of-the-art machinery) tell you to swipe your chip card the old-fashioned way. All you want to do is hurry up, right?

So somebody has done the early study. The chip card insert takes about twice as long as the swipe. If you buy something two times per day, every day of the year, you will spend an extra 85 minutes per year trying to give somebody your money via a piece of plastic. If you thought the lines were longer and slower, you’d be right — and now you know why. Modern technology.

You might ask, “Isn’t modern technology designed to save me time?” Yep. That’s why this whole chip card thing is on a fairly fast track to being replaced by your phone. I’m guessing within a decade you’ll be flashing a phone screen at a card reading device. Plastic cards will have the same plight as cameras with film, home phones, cable TV, and processed Chicken McNuggets. They’re old school, man — so ‘90s.

Chip cards are designed to curb fraud. The jury is out — too new to rate. Three out of four merchants aren’t sure. That’s why they’re willing to assume the card fraud risk versus the expensive outlay of cash to buy the insert equipment. On the other side of the transaction, card providers are working through the issuing of chip cards as well. Same high cost without real benefit is the ongoing discussion.

Both merchants and issuers have one eye on the future, thinking, “Man, this seems like a temporary disruption. Why not wait until the fundamental change of using the phone becomes critical mass?” It’s a valid thought.

Here’s why the path to the phone has been cleared. The technology that supports chip cards is also the technology being perfected for your use of the phone. Put on your thinking cap. Who sees the imminent death of the plastic card?

Card issuers will continue transitioning to get a chip card in your hand, and merchants will continue to fight with you over insert vs. swipe. In the meantime, you will be busy standing in line doing the left-foot/right-foot shuffle, thinking, “What the heck takes so long?” If you’re thinking it’s expensive for all of us while we wait for the phone to take over, you’d be right. UGH!!!

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