Some McDonald's payments made with Visa or MasterCard don't require a PIN or signature.
Consumer member Lisa Floyd got an unpleasant surprise on a recent trip to McDonald's. When Lisa swiped her Visa the purchase went through without her entering her PIN. Lisa requested that purchases on her Visa card couldn't be accepted without the PIN. So she challenged McDonald's staff on their right to do this. Lisa says this decision should be up to her. McDonald's says it's just its new express payments system. Who’s right?
McDonald's express payment service was introduced nationally in November 2010. Any payments under $35 made with Visa or MasterCard don't require a PIN or signature. They won’t accept a PIN even if you ask to use one, but you can ask for a printed receipt. The aim is to increase convenience and reduce waiting times in queues.
Customer protection
The $35 limit has been set by the payment card companies. Both Visa and MasterCard claim "payment security is our highest priority" – and that the cards are as secure under the new system as they were previously. Electronic checks still occur, and any card reported missing or stolen will be rejected.
Customers are also protected by MasterCard and Visa's "zero liability" policy, which means you’re not liable for any fraudulent purchases made with your credit card. These kinds of transactions are only approved for "low risk" merchants whose products – such as fast food – are unattractive to criminals because of their low resale value.
Public notification
Most credit-card contracts have clauses allowing the companies to amend terms and conditions as long as proper public notification takes place. This means Lisa has no comeback as McDonald's and the card providers issued a joint press release before the new system was launched – but we think Visa, MasterCard and the banks that issue them should have done more to tell their customers about this new development.
MasterCard said more communication will take place as more merchants adopt these kinds of payments, and also that the publicity around this change would have ensured most customers were aware that it had taken place. However, Lisa has been told by a worker at her local McDonalds that many more customers have been taken by surprise when paying.
Our view
- Banks, payment card companies and merchants need to make a greater effort to fully inform their customers about any changes to payment systems.
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Aussie banks made so much profit this year they can afford to pay us back if their security is decreased.
All my cards have chips. Pak n save and The warehouse have this Pin bypass. There is an annoying wait for it to disappear otherwise you sign or ask for it to be repeated with a pin instead. It's your right in my opinion.
When my handbag was stolen, even though my credit card had my photo, a pin and my signature, and I phoned the card company within an hour of the theft, the theives managed to charge $6000 worth of goods (TV, stereo,etc) in the few hours it took to get the cancellation processed. I wasn't liable and the police didn't even pursue the theft. You can order online without a PIN or signature so it's just not possible to stay completely secure.
McDonald's is not the first company to be allowed to process charges without a pin number. A large number of car parks and pay & display machines have been accepting charges without a PIN number for a number of years.
I would actually like my Visa to only work with the PIN. If it was stolen the thief only needs to practice a signature to look similar to mine, (if the merchant actually looks at it). If it only works with the PIN the thief needs to know the PIN. I have a card from a Rural Co-op (CRT) that must have the PIN used to authenticate it. To me this is a much higher level of security than a signature. I understand that the new "Chip Cards" are set to be only PIN authorised.
I am APPALLED that nder any circumstances someone could use my VISA without a pin- number. The fact that this can be done for "small" sums up to $35.00 only makes it worse - for a small sum one is not likely go go to the hassel of contacting banks etc - the money involved does not warrant the hassel in time and anxiety. PLEASE consumer advocate where necessary to stop this. I WANT EVERY TRANSACTION on my Visa account made in person with my card protected with a pin number. Anything else is a worry I don't need.,
On two recent occasions I have used the McD drive through and paid eftpos for my order. Having been burned before, I always sit my car still in the lane by the checkout window until I have checked my order is correct.
When the staff see I am checking my order, they rush over with a burger that was 'accidentaly' left out of the bag.
So... the scam is that:
1.the staff are either pocketing the cost of a burger ($8) and having not dispatched one, the books will balance or...
2. they are now a burger to the good for personal consumption or for giving to their mates at a later time.
BE AWARE!
is that Signature/PIN on credit cards are to protect the customer, but as I understand it they are actually there to help protect the merchant.
If anything goes wrong, there's little or no liability on the card-holder, most on the merchant. Therefore the merchant must only accept the card as payment if they have taken sufficient measures to verify the card-holder's legitimacy.
AFAIK, unlike true EFTPOS, the PIN doesn't actually 'authorise' the transaction, it just tells the merchant that this card likely belongs to the holder. I'm not sure about whether the merchant may be able to accept the transaction even if the PIN check fails (although they'd be stupid to do so).
Of course I might be completely wrong about all this, but if I am I hope someone can correct me.