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A quick question

July 12th, 2014

I ate at my local Italian restaurant just now and, as often happens, the credit card call didn’t go through, so I signed instead of using a PIN. Given that the banks have announced this won’t be possible in a few months time what will they do about this fairly common problem? Any experts out there?

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  1. Ramiro
    July 12th, 2014 at 19:42 | #1

    PIN is only mandatory when supported. There are plenty of cases where the PIN is not supported (i.e., the acquirer does not support PIN to your scheme, or the issuer systems are offline, etc. There are also plenty of card types that do not support PIN).

    In these instances, the transaction will fall back to signature verification as they do currently.

    The only difference is that you will no longer have a choice.

  2. Ramiro
    July 12th, 2014 at 19:47 | #2

    I’m case you don’t trust my credentials (although I used to work in PIN security for one of the big four, I no longer do and wouldn’t call myself an expert any more) there’s also a FAQ available:

  3. John Quiggin
    July 12th, 2014 at 20:28 | #3

    Seems plausible, though the FAQ does not address the situation directly. Thanks!

  4. paul walter
    July 12th, 2014 at 22:18 | #4

    Perhaps there needs to be some (re?) regulating of obligations, re institutions, as to these.

    I suppose, if the Commonwealth Bank masquerade and deregulation of set out responsibilities for financial planners is any example, you shouldn’t hold your breath as to a reemergence of common sense any time soon; rather we see the consolidating of the “plunder as usual” motif of our age.

    As a parallel, the obscured Abbott legislation supported by the ALP, which promotes corporate interests before community or individual interests as to things like gas fracking, reinforces the impression that here is a deliberate policy imposed by oligarchy acrtoss seemingly unrelated fields, to render communities and persons helpless against their financial and social dismemberment. Although this dismemberment is only symbolic as yet here, we see the ultimate destination in the actual dismemberment of Palestinians and Asylum seekers, to cite two instances.

  5. Happy Heyoka
    July 12th, 2014 at 22:30 | #5

    Can you elaborate on the “didn’t go through” ?

    Swipe or chip? The terminal wouldn’t/couldn’t dial (shared line with the restaurant phone?)
    You just forgot your pin?

    There was a fiasco in the USA recently that forced mass reversion to taking a physical imprint of the card… not much impetus to improve the situation – no commercial pressure anyhow.

    Not bitcoins or fiat currency handy? :^

  6. John Quiggin
    July 13th, 2014 at 04:44 | #6

    @Happy Heyoka

    Terminal wouldn’t/couldn’t dial

  7. Peter Franklin
    July 13th, 2014 at 09:11 | #7

    Some of the older swipe devices are a bit touchy, our local petrol station bucks at MasterCard but never has a problem with Visa. Inserting mc in device always works though. Other than that I have never had your problem. Is your card a bit worn perhaps, or scratched?

  8. Peter Franklin
    July 13th, 2014 at 09:15 | #8

    Ah! Just noticed your post #6. Dial up is a bit old hat nowadays and they would be best to update to broadband.

  9. Ikonoclast
    July 13th, 2014 at 09:32 | #9

    Use cash. Call me old-fashioned but I prefer a quick stop at the ATM (I am old enough to remember when ATMs were new!) Once cashed up, I pay in cash. If you pay for more things in cash then less of a profile gets built up on you. Of course, this theory falls down if your “trouble and strife” insists you always use those execrable rewards points cards at the supermarket.

  10. ZM
    July 13th, 2014 at 10:25 | #10

    I think if the electronic communication is down you would still be able to use one of the old manual card impress machines and sign the paper imprint , but I’m not 100% certain.

    For hospitality there are some issues with the move to PIN from signature that don’t apply so much to retail – eg. The custom of taking the payment to the diners’ table instead of them having to come to the counter, also splitting bills and tipping will become more difficult. There’s pressure to acquire new technology to deal with the difficulties imposed by the move to PIN – ie. PayPal accounts to allow diners to pay at the table that way. There are also issues with PIN for older customers who might have trouble remembering the numbers – this does happen sometimes but when it does they can just sign instead now – I heard a while ago that maybe people having these difficulties could ask their banks to use signatures still – but I’m not sure what the outcome was.

  11. Midrash
    July 13th, 2014 at 10:35 | #11

    I like to be able to lie down on long flights so take on a new credit card whenever enough bonus ff points are offered. So I suggest the obvious workaround if your cards can each be used to pay $100 per swipe assuming they each have the chip and the restaurant has the matching technology (working). Mind you experience on the sub-continent might make one dubious about this working in an Indian restaurant. Funny how American Express with its huge fees (except presumably to the big boys like Coles and Woolworths) makes the credit card machine less likely to work in Srinagar than if you proffer Visa or Mastercard. I’ve never tried but the possibility suggests itself of getting $100 spent in a swipe (actually brief press using the chip) with each of two Visa, a Mastercard and four Amex cards (until the introductory low rates cut out) before calling on one’s partners’ cards….

    Ramiro – anyone – do you think it would work?

    BTW Ikonoclast, the people I know who won’t use credit cards tend to have associated paranoias like not using mobile phones or only using email through their secretaries; and I suspect online banking is totally taboo except – perhaps – for using ATMs. And they include people who are ir have been very close to, if not all themselves, your .01 per centers. What should be inferred from that? Sounds sinister, doesn’t it?

  12. Midrash
    July 13th, 2014 at 10:38 | #12

    Moderation has just caught… what? “Indi*n”? “S*inagar”?

  13. July 13th, 2014 at 10:55 | #13

    I see people using cards for quite small transactions but I can only use my card four times a month or so before I get charged fees, so I tend not to use it very much. So are card using people paying a couple hundred or more dollars a year to their banks in fees, or do they have something different from me which avoids this? And if people are being charged hundreds of dollars a year in fees then are we really as a group dumb enough as a group for this to be a stable situation?

  14. Ken Lovell
    July 13th, 2014 at 11:34 | #14

    Wash dishes for the chef for a few hours?

  15. Debbieanne
    July 13th, 2014 at 11:34 | #15

    @Ronald Brak
    We have unlimited transactions on our account, so no fees.

  16. J-D
    July 13th, 2014 at 11:40 | #16

    @paul walter
    Palestinians and asylum seekers are being dismembered as a consequence of their credit card transactions failing to go through? Well, thanks for clearing that up.

  17. July 13th, 2014 at 11:47 | #17

    Thanks, Debbieanne. I was wondering about that. I suppose I could change, but my experience with information technology has taught me that if something works then never ever change even if something else looks much better. But I guess I might get fewer weird looks if I started using a card more.

  18. Happy Heyoka
    July 13th, 2014 at 12:04 | #18

    Terminal wouldn’t/couldn’t dial

    That would place the responsibility firmly on the business to come up with an alternative?
    (As compared to your card being declined or something, where they call the cops and you get hauled away…)

    Lucky you were local and familiar.

    I just skimmed the Merchant ToS for bank X (likely similar for all).

    Your restaurant has no grounds to chase the bank for the failed transaction except if they can prove that it was a result of negligence on the part of the bank. Good luck with that.

    Also they should have reported the failure to the bank (it’s an obligation).

    Quite possibly the bank could have done the transaction “over the phone” but I don’t see any obligation for them to offer that.

    The trick with the manual imprint is (a) you have to have a machine, and (b) you have to have a card with the embossed print.

    Mag stripe is also going the way of the dodo; in the process of swapping out a few thousand of those at work.
    Cynic in me suspects it’s a measure to get “pay wave” enabled stuff rolled out.

  19. ZM
    July 13th, 2014 at 12:31 | #19

    Ronald Brak,
    I think often there are lower or no charges by banks to account holders for credit (as opposed to savings) transactions, meaning people are encouraged to use the credit option. however, the fees charged by banks to merchants for the same transactions are I think usually lowest for savings, higher for general credit (eg MasterCard, visa), and higher again for Amex and Diners.

  20. Ikonoclast
    July 13th, 2014 at 12:34 | #20

    @Ronald Brak

    Ignore the social pressure. Use cash. I find people who use cards for small purchases (say under $50) a pain in the … They hold up the queue when a quick handover of a note and receipt of a bit of change would keep things moving.

    You are also correct to note that with automation, once things are working they tend to keep working reliably but heaven help you if you try to change arrangements with a bank or other automated business. They have tremendous trouble, in many cases, in accepting and processing changed arrangements. It’s a kind of automation inflexibility I have it noticed creeping into our institutional, fiancial and social life.

    Also, they (the corporations) attempt to force you to own things (like a mobile phone) because there are more sorts of personal finance and other transactions and applications that you can’t do without such equipment, usually said mobile phone, even though you should equally be able to do it from a desktop pc (for example). Whenever they attempt to force me in this fashion I simply don’t do business with them. If it means I can’t do certain sorts of business at all with anyone, I simply don’t do it. I make do with less and leave my money to accumulate.

    I’m not sure that accumulating money is a good idea either. I expect most financial institutions to crash in the next 10 to 20 years. Most savings will be lost. They will disappear or more likely go through some intricate channel into the pockets of the super-rich. It won’t really matter though. There will be precious few goods to buy as the world economy collapses.

  21. Chris Grealy
    July 13th, 2014 at 14:27 | #21

    I don’t go out without cash, just to cover this sort of thing and avoid embarrassment. The whole plastic thing is nowhere mature enough to be reliable.

  22. Ron E Joggles
    July 13th, 2014 at 16:10 | #22

    @Happy Heyoka
    Re: “(As compared to your card being declined or something, where they call the cops and you get hauled away…)”
    – you have only to offer some alternative form of payment, including going to get money elsewhere, or writing a check, or even promising to come back and pay tomorrow, and there is no offence for which you could be prosecuted – this applies anywhere, including restaurants, petrol stations and taxis.

    Failure of the EFTPOS system is common outside the capital cities and is usually due to phone network congestion, thanks to our antiquated copper lines.

  23. Ron E Joggles
    July 13th, 2014 at 16:19 | #23

    @Chris Grealy
    I rarely carry cash, and use my credit union’s Visa debit card. Even with 100+ transactions per month the account fees are negligible. I would never deal with a commercial bank, their first concern is for their shareholders, not account holders – mutuals like credit unions are answerable primarily to account holders.

    And there’s no embarrassment if EFTPOS doesn’t work – it’s their problem, not mine!

  24. Julie Thomas
    July 13th, 2014 at 18:33 | #24

    Could you log on to your bank using your ipad or phone and do a direct debit one off payment?

  25. July 13th, 2014 at 23:37 | #25

    With Pay Wave I now sometimes use my debit card to buy the newspaper. Basically, if a shop has Pay Wave I use it. Its finally made using a card almost as fast as cash. But like others, I do keep some cash just in case.

    I suspect that the total cost of a cash transaction is higher than a card transaction. If businesses were economically rational, they would have a surcharge for people wanting to pay with cash.

    And Ikonoclast, you are old fashioned!

  26. July 14th, 2014 at 05:04 | #26

    I put $200 on Germany to beat Brazil after watching Neymar et al burst into tears upon winning the Colombia game by penalty kicks. Cry babies will tend to choke, as Brazil did in 1950. This proved the case in 2014.

    Argentina are made of sterner stuff but I predict a German victory. The Germans have a champion team, not just a team full of champions like Argentina. So double or nothing on Germany.

    More generally the German social model has been stress tested by post-modernity and come through with flying colors – no bank crisis, no demographic winter, no ballooning foreign debt. And a country that is unifying not splintering.

    Deutchland uber Argentina.

  27. Julie Thomas
    July 14th, 2014 at 06:36 | #27

    @Jack Strocchi

    Have you not noticed that people in this country are unifying against the hegemony of the alpha male? I wouldn’t be surprised if you are unable to see this happening.

  28. Julie Thomas
    July 14th, 2014 at 07:18 | #28

    Apparently there was this Labor bloke, Joe Chamberlain who once said that the Labor party did not come into existence to win elections. He said that it is far better to go into the political wilderness than to support expediency rather than principle.

    There is only a ‘stub’ on wiki for this Joe Chamberlain; this information comes from Geraldine Doogue.

    But from this attitude in the 40’s, that Geraldine Doogue finds hilarious and amazing, the Labor party moved to Gough Whitlam in the ’70’s who said that the impotent may be pure, but it is nonsense to say that defeat is more moral than victory.

    This is the beginning of support for pragmatism and the beginning of the idea of a professional political campaign organized by the professional campaigner. These are a type of man who is prepared to win at all costs.

    And we end up with the election of a ‘Tony Abbot’, a hollow shallow simple man who will also do whatever it takes to ‘win’.

    Geraldine Doogue discusses the rise of these Machine men with academic and author Stephen Mills who has just published “The Professionals: Strategy, Money and the Rise of the Political Campaigner in Australia.”


    Mills and Doogue discuss this idea in terms of these ‘dispassionate experts’ vs the ’emotional partisan’ who is characterised as being the source of the policies.

    This is where they make the category error that leads them to misunderstand the motivations of both their dispassionate experts and emotional partisans.

  29. Julie Thomas
    July 14th, 2014 at 07:54 | #29

    hmm major category error by me here. This should have been on another thread. 🙁

  30. Nic M
    July 15th, 2014 at 18:07 | #30

    I was reading somewhere that Coles are launching a mobile phone app linked to their branded credit card that allows you to pay without a card at all.

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