Why do hotels ask us to type the pin code of our credit cards?
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?
Best Answer
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.
Pictures about "Why do hotels ask us to type the pin code of our credit cards?"
Do you need to type in PIN for credit card?
A credit card personal identification number (PIN) is basically a four-digit code which is used to verify the identity of the credit card holder. It is mandatory to enter the credit card PIN in order to complete a transaction.Why is my credit card asking for a PIN?
A credit card PIN, or personal identification number, is typically a four-digit code you use to verify that you're the owner of a credit card. Like a signature, it's used to verify your identity and helps protect you against fraud. In the U.S., you may be required to use this code for a cash advance at an ATM.Why does a hotel need my credit card?
After you arrive at your hotel, the front desk receptionist will need a credit card to put on hold before handing over the room key. A credit card hold is an insurance policy for the hotel. Specifically, the hold covers incidentals such as damage to the room, room service and dips into the minibar.Does credit or debit ask for PIN?
Credit transactionDoesn't ask for a PIN but may ask for a signature to complete the transaction. Can take 2-3 days for the transaction to appear in your account. If you don't keep track of your transactions, it's harder to know how much you have available to spend, increasing the likelihood to have your card declined.Hotel Pre-Authorisation | How Pre-Authorisation Works \u0026 How To Explain It To Your Guests
More answers regarding why do hotels ask us to type the pin code of our credit cards?
Answer 2
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.
Answer 3
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.
Sources: Stack Exchange - This article follows the attribution requirements of Stack Exchange and is licensed under CC BY-SA 3.0.
Images: Karolina Grabowska, Karolina Grabowska, Matthias Groeneveld, Matthias Groeneveld