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What Will Become of the Old "Zip-Zap" Machine?

In yet another effort to cut the cost of card issuance and increase consumer activation and usage, Visa announced last week "it will begin supporting the issuance of unembossed credit cards in the U.S. for Visa consumer debit, business debit, and consumer credit cards." I'm not sure what the world will be like without textured credit cards, but I suspect things will not change too much. Our country's leaders will still be trying to fathom just how much "$700 Billion" really is, and Oprah will still have more influence on the American public than the President of the United States.

So, is this announcement good news, bad news, or not really news at all? Visa has permitted unembossed prepaid cards in the U.S. since 2005, so this isn't a brand new marketing ploy. The difference is that now they are jumping into a much larger market, which includes consumer debit and credit cards as well as business debit cards. I believe this is great news for financial institutions, since they will no longer have to deal with the added cost and complexity of producing cards offsite and mailing them to new cardholders. Of course, most will need a lot more than this to dig them out of the financial crisis we are currently experiencing.

Consumers will also be pleased to immediately receive their personalized plastic, instead of having to wait several days before the card arrives and they can activate it. But what will become of the old "zip-zap" machine? Some "mom-and-pop" stores across the country still love the zip zap. In fact, the one and only reason we still have embossed credit cards is because these machines need to take an imprint of the card instead of simply reading the information contained in the magnetic strip.

Although there aren't many U.S. merchants left that require a manual imprint for each transaction, the zip-zap machine is actually thriving in retail locations across the globe. I just returned from a business trip that took me to Hong Kong, China, and Korea, and it seemed like I ran into the zip-zap everywhere I went. By the end of the trip, the silver paint on my credit card's numbers was completely gone from all the vigorous rubbing and swiping.

So if the notion of unembossed credit cards gets you excited, I would make sure you keep both types of cards in your wallet at this point in time. You may be able to get away with only carrying unembossed in the U.S., but don't plan on putting dinner on the card at the local Chinese hot-spot. If you try, chances are they will only accept cash anyway.

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Joshua Heckathorn's picture

Joshua Heckathorn was President of Creditnet, is a credit expert and has been featured on CNNMoney, FOX Business, Yahoo Finance, The Street, and many other national publications during the past ten years.  He received a Bachelor of Science in Management (Finance) from Brigham Young University's Marriott School of Business and earned his MBA from Seattle University.

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