A friend of mine recently travelled to the US and said that he found that payment methods there seem to be quite a way behind what we have in Australia. How different are their payment systems and is there anything I need to know in relation to this before I travel to the US?

Your friend is quite right in that the US, despite being one of the most innovative countries on the planet, has actually been quite slow to adopt changes in payment systems compared to countries like Australia. There are many areas where the US is still catching up, some of which are detailed below:

1. In Australia we have had ‘chip and pin’ cards for quite a number of years, however, such cards are a much newer phenomenon for the US. It is therefore more common in the US to swipe a card rather than insert it, which exposes card holders to increased fraud via card skimming.

Many US businesses do not even have chip-enabled payment terminals and instead have hardware that, while modern with LCD screens, still has a large slot for swiping cards rather than inserting them.

2. Despite continued reliance on magnetic strip cards, the US has greater access to Apple Pay (i.e. mobile payments using an iPhone) than Australia. Even so, only larger US retailers appear to have the necessary terminals to support payments via Apple Pay.

3. With the prevalence of tipping and employment of people in many industries that are heavily reliant on physical cash, the prospect of a cashless society appears to be much more remote for the US than Australia.

4. Cheques are still widely used in the US and they even have drive-through cheque depositories to save time going in to the bank.

5. Australia led the world in developing plastic bank notes, and converted completely to plastic notes in 1996. The US has instead stuck with paper bank notes and still uses one cent coins, unlike Australia where we did away with these denominations in 1992. 

Australian ATM cards still work in US ATMs, however, cheque and savings options are not available on most machines. You can also use Australian credit cards for cash withdrawals (beware of potential interest charges), or alternatively use a travel money card pre-loaded with US$.

Any information in this article has been prepared without taking into account your personal circumstances. You should seek professional advice before acting on any material. While reasonable care is taken in the preparation of this information to the extent allowed by legislation, Crowe Horwath (Aust) Pty Ltd ABN 84 006 466 351, accepts no liability whatsoever for reliance on it.