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[ShneekeyTheLost]

In Texas, there are only two gas chains that are charging more per gal for gas if you pay by card, Shell and Chevron. Both are seeing significantly reduced sales as a result. When you are already pricing yourself at the high end of the market, charging extra for card is only going to put you that much further out of the market. Besides, card is guaranteed by the card company, so there's zero chance of being scammed, which makes it FAR superior to checks. And the way they do cash transactions are stupidly inconvenient. First, you have to go in and pay for them to turn on the pump. Then you pump your gas. Then you have to go BACK in to get your change. Ugh.

Again, the credit card companies GUARANTEE sales by card. So even if the guy has a bad card, the card company will pay up anyway (unless card was declined and you ran it anyway like a moron). I don't know about most vendors, but I would fall all over myself begging to pay 2.5% for that kind of guarantee.

[AmriloJim]

Agreed, fuel sales are a pain. A lot of folks just pay for a volume that will fit it in tank but not fill it, and go on.
The major c-store chain here in Amarillo allows drivers to present a valid drivers license in lieu of prepayment... handy for those of us who need a receipt that states volume (prepaid receipts don't compute volume).
I've not seen any retailer charging a premium rate for credit, but all the truck stops post cash and credit prices for diesel.

[Dave]

Again, the credit card companies GUARANTEE sales by card. So even if the guy has a bad card, the card company will pay up anyway (unless card was declined and you ran it anyway like a moron). I don't know about most vendors, but I would fall all over myself begging to pay 2.5% for that kind of guarantee.

There has been a sea-change recently, though.

As of mid-October of last year, the major credit card networks have shifted the liability for "bad card" transactions to the merchants, unless the merchant installed and uses a "chip-card" reader. Only in cases where the transaction is verified by chip, will the credit card company pay for a fraudulent transaction... the merchant will be "charged back" for any fraudulent "swipe" or manual-entry transactions.

I've been very surprised by the number of stores... even some fairly big chains... that have not yet activated the chip readers in their credit card stations. I do know that the merchants are not happy about this... the new chip readers are a significant expense, the store software seems to need to be upgraded, and the chip-verified transactions seem to take 2-3 times as long as the older swipe-and-approve ones do.

Maybe there's an exception to this rule for gas stations... haven't heard so.

I do know that "cloned card" fraud has been a huge problem... the magstripe data is easily skimmer and copied to another card, and many retailers don't bother to do the "verify last four digits" physical check of the card after it is swiped. Ultimately the cost of this fraud comes out of consumers' pockets, in the form of higher prices and credit card interest rates.

[ShneekeyTheLost]

Again, the credit card companies GUARANTEE sales by card. So even if the guy has a bad card, the card company will pay up anyway (unless card was declined and you ran it anyway like a moron). I don't know about most vendors, but I would fall all over myself begging to pay 2.5% for that kind of guarantee.

There has been a sea-change recently, though.

As of mid-October of last year, the major credit card networks have shifted the liability for "bad card" transactions to the merchants, unless the merchant installed and uses a "chip-card" reader. Only in cases where the transaction is verified by chip, will the credit card company pay for a fraudulent transaction... the merchant will be "charged back" for any fraudulent "swipe" or manual-entry transactions.

I've been very surprised by the number of stores... even some fairly big chains... that have not yet activated the chip readers in their credit card stations. I do know that the merchants are not happy about this... the new chip readers are a significant expense, the store software seems to need to be upgraded, and the chip-verified transactions seem to take 2-3 times as long as the older swipe-and-approve ones do.

Maybe there's an exception to this rule for gas stations... haven't heard so.

I do know that "cloned card" fraud has been a huge problem... the magstripe data is easily skimmer and copied to another card, and many retailers don't bother to do the "verify last four digits" physical check of the card after it is swiped. Ultimately the cost of this fraud comes out of consumers' pockets, in the form of higher prices and credit card interest rates.

The reason vendors haven't gone whole-hog for the chip card reader is because most cards currently issued don't have one, and probably won't until the majority start getting re-issued. Assuming card companies ever bother to get around to issuing them without stiffing the user, otherwise it's just going to die.

I wasn't aware they were legally permitted to not honor card swipes, thought that was federal law. This is the first I've ever heard of chargebacks on card swipes.

[AmriloJim]

As Dave mentioned, the "liability shift" took effect October 1. I ordered EMV-compliant readers, and Square covered any chargebacks until those readers could be shipped. Now that I have them, I have problems with them maintaining their Bluetooth connection to the cell phone app. When I leave the cab, the phone comes with me, but the EMV reader stays in the car. When I get back, the Bluetooth link fails to reconnect. Restoring the connection is not just a matter or re-pairing the devices... no, I have to go into phone settings and delete the reader as a Bluetooth device, go into the Square app and "forget" the reader, and reintroduce the reader to the app. (Yes, I have an ongoing support issue with Square.)

[Dave]

I wasn't aware they were legally permitted to not honor card swipes, thought that was federal law. This is the first I've ever heard of chargebacks on card swipes.

I suspect that the Federal law applies to valid card swipes (non-fraudulent transactions).

https://usa.visa.com/dam/VCOM/download/ ... chants.pdf

Visa’s Global POS Counterfeit Liability Shift

Visa’s global POS Liability Shift is important to all key stakeholders in the payment industry because it
encourages a “chip-on-chip” transaction (i.e., a chip card read by a chip terminal) that provides dynamic
authentication data.

This, in turn, helps to better protect all parties. With this Liability Shift comes a set of rules for determining
who holds the liability for a counterfeit point-of- sale transaction. Under these rules, the party that is the
cause of a chip transaction not occurring, either the issuer or acquirer, will be held financially responsible
if the transaction is later determined to be counterfeit fraud.

• Issuers assume counterfeit fraud-related liability for non-chip cards at any type of terminal.
• Acquirers assume counterfeit liability if a chip card is presented at a non-chip terminal.

So, as I read it:

(1) The bank is still "on the hook" for transactions with a counterfeit card, if the card didn't have a chip.

(2) The merchant is "on the hook" for counterfeit transactions with a counterfeit card, if the card had a chip but the merchant didn't have a chip reader.

According to another section of the document, there's an exception to this shift for automated gas pumps... they have until 2017 to install chip readers. That makes sense, since the card readers are often integrated into the pumps rather than being small separate terminals, and swapping out the old ones is going to be a much bigger job.

I presume the bank (and not the merchant) is still liable if it's a chip card, validated in a chip reader (a "lost, stolen, or incredibly good counterfeit" card).

This gives the banks a big incentive to issue chip cards as soon as possible (this transfers some of the liability over to the merchants), and gives merchants a big incentive to install chip readers (pushes the liability back onto the banks, and also presumably cuts the fraud rate a lot).

I know that some stores now have "smart" dual-mode readers. They accept chip cards, they'll still accept swipes from cards that don't have chips, but if you try swiping a chip card it will refuse to accept the swipe and will say "Please insert card in reader."

To make matters even more complicated: most of the world uses a better standard for chip cards than the U.S. does. Europe uses a "chip-and-PIN" card type, which I understand has really strong cryptographic features. The security is (supposedly) good enough that a chip-reading terminal can receive and validate a strong "digital signature" for the transaction, from the card itself, without having to make an on-line connection to the bank's network.

The U.S. cards are almost all "chip-and-signature", and their chips are less powerful and provide good security only when an on-line verification process is used.

Why the difference? Apparently, the chip-and-PIN cards are more expensive to manufacture and support. Although they do a better job of reducing fraudulent transactions, the U.S. banks have apparently decided that it isn't worth the cost to them... they just continue to pass the cost-of-fraud through to the card users in the form of higher fees and interest rates.

[Alkarii]

Wow, all that trouble, versus paying with cash. So what if you occasionally have to get your change? How often is it a far walk from the pump to the counter inside?

[Sgt. Howard]

We are trading reliability for conveniance- eventually, cash will not be legal tender

[AmriloJim]

The U.S. cards are almost all "chip-and-signature", and their chips are less powerful and provide good security only when an on-line verification process is used.

Not so... US cards are "EMV" (Euro MasterCard Visa)compliant. Card readers use an online verification process, in conjunction with processing the sale. A merchant can process the sale without EMV verification by using his magstripe reader.

[Dave]

The U.S. cards are almost all "chip-and-signature", and their chips are less powerful and provide good security only when an on-line verification process is used.

Not so... US cards are "EMV" (Euro MasterCard Visa)compliant. Card readers use an online verification process, in conjunction with processing the sale. A merchant can process the sale without EMV verification by using his magstripe reader.

Yes, they're EMV... but there's EMV, and there's EMV. It's a protocol-and-capabilities family, not a single world-wide standard.

https://en.wikipedia.org/wiki/EMV

Cardholder verification

Cardholder verification is used to evaluate whether the person presenting the card is the legitimate cardholder. There are many cardholder verification methods (CVMs) supported in EMV. They are

Signature
Offline plaintext PIN
Offline enciphered PIN
Offline plaintext PIN and signature
Offline enciphered PIN and signature
Online PIN
No CVM required
Fail CVM processing

The terminal uses a CVM list read from the card to determine the type of verification to be performed. The CVM list establishes a priority of CVMs to be used relative to the capabilities of the terminal. Different terminals support different CVMs. ATMs generally support online PIN. POS terminals vary in their support of CVM depending on their type and in which country they are located.

U.S. "chip and signature" cards are not accepted by a significant percentage of chip terminals in Europe, because the cards offer only "signature" verification and don't implement the "offline enciphered PIN" EMV feature. In particular, many "unattended" chip readers, such as you would find at gas stations and train/bus ticket machines, and etc., will refuse to accept a U.S. card whose CVM list doesn't allow for secure "off-line" transaction validation. These chip readers are apparently unable to do "on-line PIN" or "signature" verification of U.S. cards.

On our recent trip to France, we were about 50:50 on the use of our new, US-chipped cards. It wasn't even consistent within corporate chains - one Carrefour gas station pump accepted my Mastercard chip, one or two others rejected it, and a Shell accepted it.

I discussed the question with our bank before we went overseas, and was told "Yes, the card comes with a PIN, but it's for use only when using the card to withdraw cash at an ATM, and not for purchases." They were correct.

Most European stores do accept "chip + signature" cards, although some of them seem surprised when the system tells them that you must sign the receipt... they're used to "customer inserts card and enters PIN" verification, with no signature required.

If you're going to be traveling from the U.S. to Europe a lot, it can be worthwhile to get a U.S. credit card from one of the (small) number of banks or credit unions who will issue a fully-European-compliant "chip + PIN" card. These are often branded as "premium" or "travel" credit cards, and may carry an issue or annual fee.

Or, plan to carry cash as a backup, and plan ahead to make your purchases at times when there's a human present to accept your cash. If you try to buy gas or a train ticket at 4 AM you may be out of luck.

[DinkyInky]

We are trading reliability for conveniance- eventually, cash will not be legal tender

Cash isn't acceptable in places already. Enterprise refused to rent a vehicle to me for cash. They refused my bank card too. They wanted a credit card(which I will never own). I made the insurance company rent it for me after the third time I tried to rent one.

[Alkarii]

That's messed up, because right there on the bills it says "This note is legal tender for all debts, public and private."

Is there really a good reason to require a credit card for something?

[AmriloJim]

The car rental agencies require credit cards because they want a way to recover damages to the vehicle that are not discovered at return check-in.

[Dave]

The car rental agencies require credit cards because they want a way to recover damages to the vehicle that are not discovered at return check-in.

Some auto companies might be satisfied with a cash deposit equal to the value of the car.

Or, possibly, a hostage. You give them one of your teenage children when you pick up the car. If you don't return the car on time and in good condition, they threaten to give your teen-ager back.

[AnotherFairportfan]

GPS can track it.

GPS can't track ANYTHING.

It's a one-way system.

The infamous "GPS tracker" that cops can stick on cars are really just radio bugs with GPS positioning circuitry included.

There is no way that i'm beleiving a chip small enough to be subcutaneously implanted (particularly on the forehead) could contain a GPS locator AND a radio transmitter. IF it has storage on-board, MAYBE your locations for the last hour or so could be read off if you got REAL CLOSE to an NFC reader.

[AnotherFairportfan]

Agreed, fuel sales are a pain. A lot of folks just pay for a volume that will fit it in tank but not fill it, and go on.
The major c-store chain here in Amarillo allows drivers to present a valid drivers license in lieu of prepayment... handy for those of us who need a receipt that states volume (prepaid receipts don't compute volume).
I've not seen any retailer charging a premium rate for credit, but all the truck stops post cash and credit prices for diesel.

We have one chain (Valero) that charges four cents/gallon credit premium, and several individual stations associated with various major retailers do also.

Quik Trip and Racetrack both issue free "Pump Start" cards, which you can put through the pump scanner to start it and then pay afterward.

[AnotherFairportfan]

The reason vendors haven't gone whole-hog for the chip card reader is because most cards currently issued don't have one, and probably won't until the majority start getting re-issued. Assuming card companies ever bother to get around to issuing them without stiffing the user, otherwise it's just going to die.

I wasn't aware they were legally permitted to not honor card swipes, thought that was federal law. This is the first I've ever heard of chargebacks on card swipes.

All cards are supposed to be chipped by the end of this year - both SunTrust (where Kate banks) and Georgia's Own Credit Union (where i do) issued new debit cards (and, i assume, credit cards) a couple months back. At least, that was the original plan; they may have backed off a bit.

Kate got a pretty new design card - mine was the same ol' boring green GOCU card.

I got a chipped card when i did my annual Easter-picture-of-the-girls new VISA card (the change is generally about June).

[AnotherFairportfan]

That's messed up, because right there on the bills it says "This note is legal tender for all debts, public and private."

Is there really a good reason to require a credit card for something?

If they refuse to rent you the car in the first place, there's no debt.

You don't have to pay for the rental with the card - they'll take cash when you bring it back - but you have to have a card with a sufficient available line to cover the minimum charge ... you don't actually pay them anything up front. (I worked for Hertz for several years.)

For anything for which the charge will be computed at a future time (car rentals, etc.) or in situations where the renter's property may never be returned at all - try renting a Redbox movie with cash (That is BOTH of the cases i just mentioned..

[AnotherFairportfan]

The car rental agencies require credit cards because they want a way to recover damages to the vehicle that are not discovered at return check-in.

Or to potentially track you if you don't being it back.

[AmriloJim]

BTW, the upcharge for credit card use on fuel sales is actually a discount for paying with cash.