Chip and PIN

Outside of North America, most countries have moved to Chip and PIN debit (and credit) cards some years ago, for example in 2005 in the UK, and much earlier in France. Mexico is now updating to these newer higher security cards.

Bancomer Chip and PIN VISA debit card (source: Bancomer)

A "chip and PIN" debit card has a small chip (actually looks like copper contacts) visible on the front of the card. When the card is used on a suitable card reader, a PIN can then be entered and compared to stored data on the card (unlike existing uses of PIN numbers, which need a communications link back to the bank).

From the point of view of the consumer, this means that more places will expect you to use the PIN number, rather than signing, which is more secure. If somebody gets hold of your card they will need the PIN rather than forging a signature that nobody checks. (yes, the security has already been cracked, but it's still more secure than a signature). Also, the chip makes it much less likely a card can be cloned (copied), which is currently a major source of fraud with magnetic stripe cards.

In practice, it'll be a while before all merchants in Mexico insist on a PIN with credit and debit cards transactions. In most countries the changeover took several years.

Replacement

BBVA Bancomer have started to set out notices to existing customers that they will need to replace their card. It's not clear yet if all customers can change their cards immediately, or whether you have to wait for an invite.

To change the card (at no cost), you will need to visit a bank branch, with valid ID and the old card. This needs to be done by the end of March 2011.

The notice I received only mentioned my MXN Peso debit card. It's not clear if US$ cards are being replaced at this time. Probably not, as the US still relies on the old magentic stripe technology.

The Future

Once Mexico has fully switched over to Chip and PIN (like much of the world has, outside North America), it'll become increasing difficult to use US (and Canadian) debit and credit cards at smaller places in Mexico. The terminals will expect to be able to check the PIN against the chip on the card. If they can't do that you may be forced to use cash. This is already a problem for North American travellers in Europe.

Maybe such a major tourist destination as Mexico switching over will be the final push the US banks need to start implementing the newer technology.

Update 10 Jan.

I've now picked up the new card. You can go to to any teller window to do this, with your old card and some ID. You'll then receive the new card, and should immediately activate it at an ATM with your old PIN.

The new card is a similar card to the previous card, with no name embossed, but now has the chip contacts on the upper left, and is valid for five years. The ATM also has an extra screen message now to say it's checking the chip.

At present, only the Peso debit cards are in stock. The US$ debit cards WILL also need to be replaced before the end of March, but our local branch doesn't have them available yet. (Update 31 Mar: no, they have no immediate plans to replace the US$ cards, might be a year or more).

If you have online banking with Bancomer, remember to use your new peso debit card number to access the account, rather than the old number.