“How to Replace a Lost or Stolen Credit Card in Under 2 Months”
Due to the persistent shortage of chips, customers have to wait up to eight weeks for replacement credit cards.
Rogelio V. Solis/AP
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Rogelio V. Solis/AP
Due to the persistent shortage of chips, customers have to wait up to eight weeks for replacement credit cards.
Rogelio V. Solis/AP
It used to be that if you needed to urgently replace your credit or debit card, you could get one in about a week. No longer. It can now take up to eight weeks to get a new card.
Over the years, credit cards have increasingly relied on chip technology for increased security. Embedded in these chips are a user’s account number, identification information, and cryptographic keys, making cards more secure than magnetic strips. When pandemic-related supply chain disruptions led to a massive chip shortage, Card manufacturers suddenly found themselves alongside other industries that also rely heavily on chip technology.
“Our industry is in competition with the automotive industry, for example,” says Alain Martin, who represents Thales, one of the world’s largest payment card manufacturers, in the Smart Payment Association. “They’re using the same type of chip technology, and so because of that competition, there was more demand, shorter supply, hence the delays.”
“You don’t need a plastic card with a chip!”
In many parts of the world, whipping out a plastic card to make a purchase is a thing of the past.
“The technology is there to do it completely differently,” says Aaron Klein, who focuses on financial technology and regulation at the Brookings Institution and worked on economic policy at the Treasury Department after the 2008 recession. “America is behind the times. Our payment system is extremely outdated. In China, everything runs on smartphones in QR codes.”
In China, 45% of adults will use mobile payments daily by 2022, according to data from business intelligence firm Morning Consult. India ranked second in daily digital wallet usage with 35%, while in the US only 6% used their digital wallets daily, behind Brazil, Spain and the UK.
Klein believes that the Federal Reserve, which regulates banks, has been slow to encourage the financial system to evolve and adopt more sophisticated systems. But another big reason the US has been slow to move away from the card system is that Americans have long been suspicious of digital wallets. Consumers didn’t embrace the idea of flashing their phones to make mobile payments.
But the pandemic appears to be changing attitudes.
“Consumers have been thinking more about social distancing, hygiene and speed, and moving through in-store queues more efficiently,” said Jordan McKee, research director for the financial tech practice at S&P Global Market Intelligence. “We found that mainstream consumers across the board are starting to care more about mobile.”
While fewer Americans use digital media compared to people in other countries, mobile payments for in-store purchases in the US have increased significantly in recent years, from less than 5% of in-store purchases a few years ago to about 30% today .
McKee says this sudden takeover could be an opportunity for the financial system to catch up with other advanced systems within the global financial system.
Until then, for those not quite ready to part with their plastic, credit and debit card delays are likely to continue throughout the year, experts say.
Source: www.npr.org
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