Ipads and Apple lend weight to the, often correct, notion that the US is at the forefront of consumer technology, not so when it comes credit cards and RFID chips.

As with the metric system, the US is soon to become the lone standout amongst developed countries when it comes to using RFID based chips that require a PIN instead of of the six decade old magnetic strip on credit cards.

The European Payments Council the decision-making and coordination body of the European banking industry in relation to payments, passed a resolution in January of this year stating that the use of magnetic stripe fallback should be restricted to "exceptional cases" and enabled banks to decline magnetic stripe transactions if they chose to do so.

European authorities mandated the move to the chip and PIN system, known as EMV (Europay, Mastercard, Visa) largely due to prevent  incidents like the largest credit card data theft ever to occur in the industry's history when hackers broke into the computers at Heartland Payment Sytems in 2009.

The downside to Americans thumbing a nose at the world when it comes to the adoption of the metric system has been documented over the years and runs into billions of dollars in costs to US manufacturers.

While using credit cards with the anachronistic magnetic stripe may not yet cost mega dollars American travelers overseas are already finding out that they are cut off from using their cards in a variety of situations such as kiosks in train stations. 

The move towards EMV systems in Europe was well under away even before the Heartland disaster as this article in the New York Times from October 2009 notes. The NYT article noted that Americans looking to spin around Paris could not rent the "popular Vélib' bicycle" in the city's bike rental system.

While northern neighbor, Canada is already in sync with the Europeans, so far none of the credit card majors in the US such as American Express, Visa or Discover has shown any indication that they are considering much less adopting RFID.

That is largely because of merchant resistance associated with the costs of swapping swipe machines for those that accept chip based cards.

The fact that savings from a drop in fraud are likely to offset a good deal of the costs associated with the change does not seem to have swayed the luddites in the US.

That is unfortunate for both individuals and businesses as besides the opportunity cost, the direct cost from theft alone ought to end any debate about the merits of going forward with chip and PIN.

Vijay is Chief Operating Officer and part-founder of Apple Core Hotels- a chain of 5 midtown Manhattan hotels offering value and comfort in the heart of the city.Member of the board of Directors - Hotel Association of New York.

www.vijaydandapani.com