Posted by admin on Nov 09, 2009

 

According to research firm Aite Group U.S. payment card issuers lost nearly $4 billion in charge volume in 2008, including $78.7 million in interchange, due to problems cardholders had with their cards while traveling abroad. The issues Americans have with cards while traveling can be divided into “hard” problems such as declined transactions at the point of sale or “soft” problems, such as foreign-exchange fees or fear of fraud.

Credit card issuers often decline authorization when a cardholder’s legitimate request originates abroad. Automated fraud-monitoring systems flag a transaction as risky because it originates from outside of the US. Even though the card holder is physically present with the card at point of sale, the transaction is declined.

When encountering a problem with a card, 61% of cardholders pay by cash and 29% use another card. After a trip in which they had a card problem, 19% of card holders said they used the problematic card less.

In addition, US cards are rejected at point of sale outside of the US because most US the cards do not have an EMV chip. EMV is widely used outside of the US and is less vulnerable to fraud than are cards that rely simply on magnetic strips. Problems for U.S. cards will grow as more merchants worldwide install POS terminals that read only chips.

For more information, contact info@paynetsecure.net