They can charge the credit card without us having to type the pin code (e.g. when making online bookings with prepayment), so why won't they do that at checkout?

  • I've stayed in quite a few hotels where they want my PIN when pre-authing money at checkin, and don't need it at checkout, so it varies
    – Gagravarr
    Jun 5 '15 at 21:47
  • I couldn't use the card I wanted to use at checkout to pay for meals I had because they said they couldn't charge it without the pin and I didn't remember the pin of that card. I found that strange because they had no problems charging that card for the online prepayment of the room. Also, if the hotel would just charge the credit card on its own, you could just abolish this whole hotel checkout waste of time. Jun 5 '15 at 21:55
  • Talk to your bank / credit card company - they'll help you get your PIN reset. Having forgotten your pin isn't really the hotel's fault...
    – Gagravarr
    Jun 6 '15 at 9:22
  • I do have the pin, but it's stored on a file on my computer. Thing is that I have about 15 different prepaid credit cards, I know the pin of only a few of these by heart. Jun 6 '15 at 12:58

It's very easy (and unfortunately quite common) for card holders to create chargebacks for retail purchases they legitimately made on their credit card. At hotels, it's even more common to come across unscrupulous travellers seeking a cheap vacation who rack up a bill worth thousands of dollars and charge it to a fraudulent credit card along with stolen or fake identification. Weeks or months after checkout, the hotel will see the entire amount reversed by the bank, and they have very little recourse to recover those funds. The chip-and-pin system is designed to completely eliminate the possibility of fraud. Banks are so confident in this technology that if fraud does occur using the chip-and-pin system, the bank will accept full liability and the hotel will not lose a dime. Even if a credit card number and CVV was provided during the reservation and a deposit was applied to the card, it would be irresponsible for the hotel not to verify that card by requesting the balance be pre-authorized using chip-and-pin (on the same credit card) upon arrival, thus proving to the bank that the card holder has indeed authorized the transaction.

  • 1
    Which is why skimmers are becoming so popular and sophisticated among crooks. Having a credit card number and PIN together is quite valuable to them.
    – chx
    Apr 23 '19 at 6:19

There are two modes for them charging a card. "Card holder present" and "Card holder not present". Obviously if you aren't there you can't enter your PIN so they waive that requirement for that mode.

  • I see. I think it would be easier if they would always use the "Card holder not present" mode and just charge the card for the costs made and let us leave the hotel without having to stand in line for the checkout. It's all a big waste of time. Jun 5 '15 at 21:57
  • 2
    But straying from the standard usage could open them up to legal complications in case of fraud.
    – Phil
    Jun 5 '15 at 22:01
  • 3
    The bank that processes the hotel's payments sets the rules and the front desk has to follow them. Plus it is kind of hard to claim "card not present" when you are swiping it through a terminal.
    – user13044
    Jun 5 '15 at 22:14
  • 3
    But for card holder not present transactions, you generally need to enter your billing address, and CVV number. And at least in the UK you may be be prompted to enter digits from a 8-16 digit security code. I'd certainly rather enter a PIN than that little lot. Particularly as my address sometimes confuses payment systems.
    – Phil
    Jun 5 '15 at 22:36
  • 4
    Generally "card holder present" transactions are cheaper than "not present" ones as there is less possibility for fraud.
    – neo
    Jun 6 '15 at 7:01

The PIN is required to do a chip & pin transaction. (The credit card itself is a Smart Card if it has those metal contacts in the side. They are to connect to the card's "chip". Much like a SIM card for GSM phones.)

The PIN is used to unlock the card, so it can authorize a transaction. This is checked by the card itself, and getting it wrong enough times in a row (usually 3) will lock the card.

As a result, the risk that someone's using a cloned or stolen card is greatly reduced. (Since only the card's owner should know its PIN code.)

I expect most payment processors require the use of chip & pin wherever it's available, or at the very least give lower fees to merchants when it's used.

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