Tuesday, March 8, 2016

Why I Started Using Apple Pay

Cade Metz:

As you wait in line with your razor blades and Softsoap, some other poor soul will swipe their credit card through the reader on the counter—and nothing will happen, because it’s one of those new chip cards designed for better security. Then, a (slightly exasperated) cashier will tell this poor soul to push the card into a slot at the front of the reader. The poor soul will do this—and nothing will happen again, because the new chip tech is horribly slow.


My local drugstore is a CVS, and the card readers are made by a company called Verifone. But all this sorrow is only partly their fault. The problem also lies with the new chip technology itself. The big-name credit card companies are forcing stores across the country to adopt this “EMV” tech (short for Europay, MasterCard, and Visa), and at best, it’s noticeably slower than paying with a good old fashioned magnetic stripe card. At worst, you’re stuck in line at CVS for ten minutes with your razor blades and Softsoap while some sort of archaic cash register reboots itself.

I was initially skeptical of Apple Pay because it didn’t seem like it would be faster, and I have to carry the credit cards, anyway. Since then, Apple made Touch ID much faster. And merchants started using these chip readers that are shockingly slow and often fail to work on the first try.

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Ben Kennedy

Stripe readers often fail to work on the first try. Also, they offer no PIN countermeasure, and are thus inherently less secure. They've been in use everywhere else in the world for decades. Welcome, USA!

That said, Apple Pay is still not here in Canada (I periodically hassle my bank about it), and I am keen for it to arrive.

@Ben Stripe readers fail immediately. The problem I’ve had with chip readers is that they fail after 20+ seconds and then you have to wait again when you retry. And, FWIW, I have never been asked for a PIN when using a card with a chip; they just have me sign, like always. It seems like the chips offer benefits to the merchants but don’t help me, the customer, in any way.

Is the tech just really badly implemented over there? Here in the UK I experience a few dud readers every year, but generally the only thing that makes the chip + PIN system seem slow is the new contactless system that's been quickly replacing it for most of my card transactions over the last year or two. (And I've not seen anyone *sign* for a card payment in a decade or more.)

Presumably whatever's currently being rolled out in the US shouldn't be worse than what we've had in Europe for all these years? Given how much it seems to reduce fraud, you'd think there'd be quite an incentive for the card companies to make it attractive.

Out of curiosity, do you traditionally hand your card over for the salesperson to do the reading? The UK changeover from mag stripe to chip + PIN coincided with another change: before, we'd hand our card over to the salesperson, and they would run it through the machine and ask for a signature. But with chip + PIN we started a habit of never handing over our cards, and the card reader moved from behind the till with the retailer to in front of the till with the customer. I guess that might have helped as a big obvious signal of what method was in use at any given retailer during the transition.

@Matt Yes, I guess it just isn’t implemented well here. I don’t know why we don’t use the tech that’s already proven itself elsewhere. My understanding is that the card companies are using more of a stick than a carrot. No, I always put my own card in the reader. It already worked that way for swiping in most places (except restaurants).

In Australia, we use the contactless system with CCs, and it is unbelievably good. It's generally done within a second or so. No PIN required for under AU$100 purchases and its faster than cash. Even when a PIN is required its still faster than cash. The previous chip&PIN system was also pretty good, faster than swiping the card and signing by a long way.

For some context from France:

- Chip and pin cards and readers have been common for the last 30 years (at least; can't tell before that). Our cards have magnetic stripes, but only for compatibility with readers without chip sensors (in practice, only abroad: never seen one in France): readers with both sensors refuse to process the magnetic stripe of your card if it also has a chip (I tried once, while in France in preparation for a trip in the U.S., and it failed and the cashier informed me of this safety limitation). Which brings me to the point that card readers here are actually integrated devices with both kind of sensors (and a screen and keypad for pin entry); the newest ones also feature a sensor for this contactless system that I do not know whether it interoperates with the NFC tech featured on smartphones (among others): Apple Pay still hasn't made it over here.

- I've never found chip and pin to be slow, but maybe I don't have the same kind of expectations; the Wired article seems to describe (apart from the exception recovery modes, which happen exceptionally here) how it simply works over here, in a somewhat dramatized way.

- This may be related to the fact that most people in France, including myself, do not use cards for everyday purchases: we (and I) almost always use cash for the bakery, for most groceries, for the dry cleaner, for buying newspapers and magazines, for buying a sandwich at the counter, for drinks, etc.; It's half and half for places like the weekly supermarket resupply, the butcher, the restaurants, the fuel resupply or the highway toll (depending on amount, in particular); most of the time we use cards (and even then, not all the time) for electronic devices and the like, for clothes, for furniture, etc. Automated train ticketing machines is one of the few cases where having a card is a must: very few take cash, and even fewer take banknotes; online purchases is another, though this has improved in the last 10 years as you can now buy iTunes or Google store credit (with cash) in many physical retailers, but a card is still a must for everything else online.

- I'm unable to tell you whether people use cash or cards at the drugstore, as here in France the drugstores have the silly idea of only selling drugs (and assimilated).

- Supermarket and chain stores typically have a minimum of 1€ for card purchases, however independent retailers (e.g. butchers) typically have a minimum of 10-15€; once or twice a year I realize I don't have enough cash and am under the minimum, and I have to go to an ATM and return to get my purchases (I've gotten much better at planning for this than I was in the past). Some corporations like physicians don't take cards at all and are typically paid by cheque.

- In my experience chip and pin is slower than cash, not by much in case change is needed, more so when it isn't or when the change is simple (e.g. newsstands), where a card payer will indeed not be processed as fast. In some cases the reader needs to phone home to validate the transaction, in which case it is much slower. However, neither case prevents the cashier from handling another customer, even for another card transaction, while the first is ongoing: my butcher has a second card reader for just this purpose; so this hurts latency, but not necessarily bandwidth.

- I don't think I've ever had to sign anything for a "simple" purchase. I've only ever had to show an ID for cheque purchases.

- Attempts (mostly by banks) to introduce card-based systems for everyday purchases (e.g. Monéo) have largely failed.

@Peter and Pierre: Thanks for those perspectives. A lot of the readers here are integrated like what Pierre describes.

The Wired article makes it sound faster than what I often see.

I pretty much never use cash except for emergencies, parking, and miscellaneous small tips.

Even with Apple Pay, I still have to sign usually.

I don’t think I’ve ever seen a second reader in use like that. Even with cash, pipelining customers is rare.

With the caveats that chip card readers don't seem to be very widely deployed/in use here (Atlanta suburbs) and that my main credit card has yet to be reissued chip-enabled,* nothing I've seen around here has come anywhere near close to the slow (what I'd label "disaster") scenarios mentioned in the Wired article. It's certainly—I don't know, maybe 3-5 times—slower than swiping and signing and adds up when you're waiting in line, but so far in all of my experiences as a user or person waiting behind a user, it's noticeable but not yet so bad as to be annoying.**

It would be helpful (although I suspect it's impossible due to the way the system works) if you could insert the card before the ringing-up-items part of the transaction was complete, so that the card and reader could do any preliminary work beforehand, and then only have to "wait" on the final authorizing/submitting the completed transaction. I suspect, however, based on the layman's overviews I've read, that the system has to know the final purchase amount before the "fake cardnumber" and whatnot can be generated.

All of the readers I've seen/used here also have the chip-card slot at the bottom of the reader where it is both visually hard to locate and physically more complex to insert the card, particularly when the reader is angled up at 45 or 60 degrees to make the reader easy to use for reading the screen, using the keypad, and swiping. Most people I've seen (me included) seem to spend several seconds trying to find the slot (even the ones with the blue lights to alert you that it's down there) and insert the card before the computing part of the slowdown can even start. Some sort of guide that extends out of the reader underneath the slot (so that you could slide your card along it a little to hit the slot) would probably help, but it seems like another location altogether for the slot would be better. The bottom of the reader is great for privacy, horrible for usability.

Given the chip system has been in use in the rest of the world for ages and reader vendors like Verifone are also active in the international market, it seems like these usability problems would have been addressed before showing up in the US. Maybe the rest of the world is immune to the slower speed (as Pierre alludes to) due to the fact many people outside the US have no experience, or at least limited memory, of swiping, but I still would have expected that 30 years would have produced better hardware designs that made inserting the card into the slot quick and easy.


* I think most large chains (groceries, drug stores, hardware stores, etc.) have chip-enabled readers, but the chip parts are not active at many of them. Kroger (one of the major grocery chains here) made a big deal last month about turning the chip slots on, but other grocery stores still don't have them turned on. Also, between us, my parents and I had I think four cards reissued last year before October, and only one of them was re-issued as a chip-enabled card—the one that had to be reissued because of fraudulent activity. It feels like merchants and card issuers alike were betting that the transition was not going to happen and acted accordingly (not unlike the pre-iMac USB world)!

** I believe there's a very large segment of the American population that uses credit (or debit) cards for most every purchase and rarely uses cash, like Michael noted; for me the credit threshold is somewhere between $10 and $20 (but it also depends on how much cash I have on hand). So any added time to complete the transaction is going to build up because of the widespread usage of cards here.

Bryan Pietrzak


"** I believe there's a very large segment of the American population that uses credit (or debit) cards for most every purchase and rarely uses cash, like Michael noted; for me the credit threshold is somewhere between $10 and $20 (but it also depends on how much cash I have on hand)."

I'm one of those people. I never carry cash. In fact, I can't remember the last time I had cash in my wallet (which is just a thin bit of leather containing just my driver's license, my credit card, my bank's debit card and a costco membership card. nothing else)

Every purchase I make goes to my credit card - even if just a dollar or two.

I earn cash back on my credit card and have autopay setup on it so that I never pay any interest on it, but gain a tiny bit from the float it provides me, not to mention the 1.5% cash back.

@Bryan Yes, that’s the way to go. Why use dirty cash when you can get 1.5-2% cash back on everything (or 3% on gas and groceries) with no fees or interest? The downside is that to really maximize this you need to carry several cards.

Only one problem with using Apple Pay as an alternative to chip readers; I have my only chipped card in Apple Pay, and I've had chip readers demand that I put the physical card in, rather than let me use Apple Pay.

What blows my mind about the situation here in the States is that, as I understand it, essentially 100% of the new chip-and-PIN readers are *also* NFC-enabled and *could* work with Apple Pay, but a large majority of retailers simply haven't turned the NFC feature on. Fortunately, our local big grocery chain in the Midwest is one of the more enlightened ones and I've been able to use Apple Pay there since the first day I had an iPhone 6.


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