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Comment by Globz | Hacker News Reader

This is the first time I am reading about this product but why mag stripe over smart cards? isn't it less secure and deprecated technology? it seems very useful but relying on mag stripe isn't the best move, no? Perhaps they couldn't "switch cards" while using smart cards so mag stripe was the only solution?

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In the USA, magnetic swipe readers are EVERYwhere. And the collection of credit and debit networks connect every reader with almost every bank. It "just works" everywhere, and it's "impossible" for a retailer to be unable to connect to your bank.

-Chip-and-pin? The card reader probably can't read it.

-Apple/Google wallet and similar services? The card reader probably doesn't have an antenna for it. (Especially small retailers who can't afford the special card reader)

-NFC Visa/Mastercard? The card reader probably doesn't have an antenna for it.

-Paypal? Most retailers aren't set up for it. That's why Paypal issues magnetic cards in the USA.

-Paper checks? Most retailers don't want to lose money on the possibility of fraud. And most card readers can't auto-ACH a check.

Mag stripe readers are everywhere, but the banks have already started migrating over to chip and pin cards (with mag-stripe for backwards compatibility) for new issues. There are still older cards out there that won't expire for probably ~5 years or so, so I expect to see mag stripe readers around for at least that long. But it's fair to call it deprecated, even in the US.

However, the transition is coming to the US sooner rather than later. Banks want to see this transition happen quickly so that they can reduce fraud rates. Merchants that don't want to spend money on new terminals will be prodded along by the banks pushing fraud liability over to them.

This all ultimately means that this iteration of the Coin Card (mag-stripe only) has a pretty limited shelf life.

I keep hearing this, but I got a new Capital One card in the mail literally 2 weeks ago, and still no chip. Same with my Schwab card which is < a year old. I don't get it. (I live in New York FWIW)

If my bank (credit union) has transitioned to chip-and-pin, they have done so without telling me.

The cards they issue are pressed at the main branch; I had to wait while they printed my latest card. The process they use to print doesn't emboss the card - the little numbers don't stick up - and as such they have nearly rubbed off from the card.

I got that most recent card in September of 2012, and it's already wearing out; the magnetic stripe hasn't been reliable for 6 months, and the numbers are so worn off the front that cashiers have trouble hand-entering it. It doesn't even have the Mastercard NFC antenna.

I really, really doubt that most of the USA's banks are anywhere near ready for a transition.

I got a new card (2 years early) to replace a card with an NFC chip. This was Wells Fargo, so bigger than a credit union. I got the replacement, but my wife didn't. I originally had an NFC card, whereas she didn't. I think that the fact that the first NFC translation in a long time was made a few weeks earlier at an airport may have had something to do with the timing.

Regardless, the changeover has already started. It may take a few years to be complete, but the writing is on the wall.

Some small banks will take longer than others to get ready, but many have already started sending out cards with chips when it's time for you to get a new one.

The silly thing is that the US is mostly standardizing on chip and signature, which means that if your card is stolen, it's still easy for criminals to use it until you're able to block it.

From October the merchant is responsible for fraud if the card has no chip and he accepts it.

Be prepared for a lot of merchants not willing to take that risk and to decline your card if it has a mag stripe only.

Yep, my latest Amex came with a chip, and when I tried to swipe the mag strip at WalMart (don't you judge me) the reader actually said "Must insert card" which was really confusing until I noticed it had a chip reader. Pretty cool.

Target has very quietly replaced all of their terminals with chip/pin readers. It looks like they started shortly after their huge data breach, which makes sense.

At least when I researched about a year ago, it's uncommon to get a true chip-and-PIN in the US. Most of the chips are chip-and-signature.

How is chip-and-signature different from the current policy where the buyer (sometimes, decreasingly) has to sign for credit purchases?

I think it's just that it's more resistant to card cloning. The payment terminal makes the chip authenticate itself in some way that run-of-the-mill carders with a card printer and magstripe writer can't counterfeit. I guess the chip or the payment network then request the cardholder's signature, rather than the PIN that chip-and-PIN use.

It's the same in Europe. You can pay everywhere with any debit card. These cards have both a magnetic strip and a chip. The readers have a slot for reading with the strip and reading with the chip. Most shops have taped the magnetic strip slot shut because it's deemed insecure. Indeed, the only reason that Coin works at all is that magnetic strips can be easily copied, also by criminals with fake readers, or criminals who put a small card copy gadget in front of the reading slot of an ATM machine, along with a camera to capture your pin code.

Then again, the whole credit card system which is popular in the US is even more hilariously insecure (you only need a picture of the card!!) and it doesn't seem to have stopped anyone.

The fraud aspect doomed Coin (and probably the similar competitors) from the start, IMO. It either wouldn't catch on (in part due to fraud or fear of fraud). If it did take off initially, we'd enter a carders' utopia where fraud would be easy because merchants would swipe any magstriped gadget without blinking, which would kill Coin when the card networks clamped down. And regardless, it basically only works in the US, where the clock is ticking towards the death of magstripes -- though I guess if they sell tens of thousands of magstripe Coins before that happens, they don't care.

It may be useful for loyalty cards, but even that has similar problems with the cashier being confused/skeptical, or just the hassle of talking about it when you just want to finish your transaction and leave. Apple Pay has apparently opened the way for loyalty cards over NFC[1], so hopefully that will keep spreading both in merchant numbers and availability on other mobile platforms.

[1] http://9to5mac.com/2015/06/10/verifone-apple-pay-loyalty-car...

The security that a smart card provides would actually prevent a product like this from working because one of the primary purposes of the chip system in CCs is to prevent cloning, but this relies on simply being able to enter your CC number into it.

I can't remember what it was called, but I remember reading about something that does use a chip card and allows you to switch payment providers using a phone app, but they were actually acting as a payment processor and had agreements with the card providers that they support to redirect charges to whoever you had selected at the time.

Plastc, https://www.plastc.com, has solved the multiple chip and pin issue. Although in an interesting yak shaving way due to the emv restrictions.

https://www.plastc.com/blog/talk-with-the-founders-update

"Shipping Summer 2015"

This is clearly vaporware, or worse yet, a scam. Have they demonstrated a working prototype yet? Everything on that page is renders. If they haven't, there's no way they're shipping it next month. And features like e-ink screen and Chip&Pin cloning make it even less realistic.

wow this one looks very promising also Chip-and-pin enabled.

Oh this makes a lot of sense, thank you for the clarification.

Too bad the product is unreliable or else I would get one right away.

Kinda like apple-pay then...

It's not quite deprecated in the USA, yet. Just nearly everywhere else...

Except when you're the top country by economic standards the "everywhere else" has zero weight. Thus why it's still the standard.

>Except when you're the top country by economic standards the "everywhere else" has zero weight.

That's really ignorant. Bank card security sucks enough without mag stripes (I'm looking at you, online payment). Really, magstripes need to die.

Well for them it is money lost due to fraud vs money spent on tech upgrade. Until money lost to fraud is tolerable banks are not going to upgrade, it also seems that a lot of big banks are very short sighted, like it was with 2008 housing bubble.

It's not just the banks, the major US retailers are very resistant as well, or so I am told by people in the industry who deal with the US market.

> That's really ignorant.

Not at all, sounds like you to need a little review yourself [1]. At no point in my comment did I support mag stripe, just simply explain why it's still in widespread use. If you ever have worked in the finance industry you would understand that. Nobody is arguing that it should stay, but it's important to understand WHY they are still around. Just because it's the major standard doesn't make a good one.

Ignorant? Really? I expect more constructive comments here on HN instead of running around and calling people's comments "ignorant". Perhaps you need to review the HN Guidelines [2]. Specifically: 'When disagreeing, please reply to the argument instead of calling names. E.g. "That is idiotic; 1 + 1 is 2, not 3" can be shortened to "1 + 1 is 2, not 3."'

Alas, it will not be happening based on the latest abuse of downvotes on HN.

[1] https://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28no...

[2] https://news.ycombinator.com/edit?id=9920207

Being number one out of two means you're the majority. Being number one out of over a hundred does not. You claimed that because the US is number one (with 15.6% of world GDP), the other >100 countries (with 84.4% of world GDP) have "zero weight".

"The rest of the world is irrelevant" doesn't go over well and gets downvoted because it's obviously false.

Is GDP the relevant metric to assess this?

On credit/debit card transaction volume North America represents 40+% of global market.

https://www.capgemini.com/resource-file-access/resource/pdf/...

Right, except it's not in widespread use, it's only in use the USA.

The USA does have a huge economy. However in this matter it does not dictate the standard, and there are more people doing more card transactions outside the US, with non-stripe technologies, than there are in the US doing them with.

Except it's not still the standard, at all. In many places now you won't get very far with a mag stripe.

The USA is an anachronism here, the rest of the world has moved on and has other standards.

> isn't it less secure and deprecated technology?

Uhhhh...no? I've lived in the US my entire life, and while I've seen pin and chip readers, I've never had a pin and chip card, never known anyone who has ever had one, and never seen one used. Ever.

That'll change very shortly, first of my US credit cards was just reissued with a chip and you can expect that all of yours will be within the next year or so.

Note that it is Chip and Signature though, not chip and pin.

My bank card expires in a couple of years, so we'll see if my next card is chip and pin (or chip and signature). Hopefully, things will have changed by then.

I've had a chip in my card for many years now, but that's probably because it's a "travel" card and it's there so that you can use it abroad. All new replacement cards I've received in the past year or so have had chips. I also see chip readers on terminals at most retailers but curiously they have them turned off for now.

I got a (brand new, of course) corporate card from my employer last year, and it only works via magnetic stripe.

It's deprecated in most of the rest of the world now, we've moved on through chip-cards and now contactless cards. The USA is really behind in credit-card tech.

The Coin card was never going to sell outside the USA (not that that's a small market or anything! But even the US is going to move on eventually).

> The USA is really behind in credit-card tech.

It's not so much the USA as it is the American financial sector. Finance moves at a glacial pace.

Well, it's the retailers as well from what I know, national chains in the US have comparatively large existing card-reader estates and they're not keen on replacing them all, or retraining staff. Not that these pressures are unique to the USA but they do seem to have taken prevalence over fraud concerns.

Here in Canada we mostly use chip-and-pin cards, glad to be ahead of US on this one.

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