Nearly two years ago, I blogged on this site about some of the financial challenges I faced while on a two-week trip in Europe. Other than pay toilets and the large minimum amount required to use a credit card, an issue I frequently encountered in France was the lack of acceptance of American credit cards on the metro ticket machines.

Chip-and-PIN cards, which are popular in Europe, hold a very special place in Emily’s heart.

If you wanted to buy a bus, subway or train ticket from one of the automated machines, you had to use either euros or a chip-and-PIN credit card, which are standard in Europe. You could use an American card if there was an attendant at a booth, but there often wasn’t one present.

Chip-and-PIN credit cards feature an additional layer of security. They work differently from the traditional magnetic swipe cards; rather than being swiped, they are inserted into a reader and the user enters a PIN number, much like they would for a debit card. They are so widespread in Europe that, if you use an old-school swipe card there, they heavily scrutinize you.

Although chip-and-PIN cards have been the norm in Europe for some time, no issuers in the United States made this type of card, until recently. We wrote about the launch of the first American one, issued by the United Nations Federal Credit Union, but there’s no word about when one will be available to the general public. This makes traveling to Europe with plastic a frustrating endeavor for Americans.

Jim Bruene, publisher and founder of NetBanker, a finance and banking blog, wrote a recent  post about this very topic. He discussed the modern Velib bike-sharing program in Paris, which allows anyone to rent a bike through automated, unmanned kiosks throughout the city. You can subscribe to the service for 5 euros a week or 29 euros annually, and that gives you the first 30 minutes of any ride free. You’re charged hourly after that. The catch? They only accept credit cards and debit cards, and you guessed it — they only take chip-and-PIN style cards.

Bruene spent a week in Paris last summer and really wanted to use these bikes, but wasn’t able to because the style of card he had. He observed many tourists try and fail, not understanding what the problem was. (Jim later found out that all American Express cards do work with these machines, but it was too late.)

In his post, Bruene argues that financial institutions are missing an opportunity to “pick up market share among well-heeled international travelers.” He suggests the creation of a prepaid chip-and-PIN card that would be much like the modern day travelers’ check, and it could be distributed online for widespread use. I completely agree — that would be such an asset to American travelers going abroad.

Bruene also mentions that Canada is in the process of converting to chip-and-PIN cards, so I hope American issuers are gearing up! If not, we may find ourselves only able to pay with cash overseas.

What do you think? When will America convert to chip-and-PIN cards? What should we do until then?

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