Microchip Shortage Forces Credit Card Customers to Wait Months for New Plastic

By Yehudit Garmaise

Instead of the five to 10-days that credit card customers usually wait to receive new plastic, thanks to a global semiconductor shortage, Americans are not happy to be forced to wait up to six weeks for new cards to arrive.

While the increasingly chip-enabled debit and credit cards’ delayed deliveries are forcing some consumers to use mobile wallets on their smartphones, other Americans whose cards are delayed are requesting that banks at least send them their credit numbers by mail, the Washington Post reported. 

Credit cards that feature the small gold and silver square microchips were swiped or inserted for 85% of Americans’ purchases, and 92% globally, from July 2021 to June 2022.

While credit cards with microchips have been commonplace in Europe for at least a decade, they have only become standard in the US in the last couple of years.

When the pandemic spiked a surge in both online shopping and consumers’ desire to avoid unnecessary contact with people and unsanitary surfaces, the EMV chip, which can just be tapped at check-out. 

The chip technology also reduces the possibility of fraudulent transactions.

Credit card manufacturers cannot keep up with consumers’ demands for chip-enabled cards because the time required to produce the microchips has increased to 20 to 25 weeks from 10 to 14 weeks pre-pandemic.

While politicians have been blaming “supply-chain” issues on the microchip shortage, industry experts explain that the chip shortage was exacerbated by the small number of factories that have the necessary technology and training to build them.

In addition, microchip manufacturers prioritize higher-profit industries, such as those that make smartphones, computers, and automobiles over credit card companies, pointed Lewis Black, the chief executive of Toronto-based Almonty Industries, one of the world’s largest producers of a semiconductor component. 

In addition, President Biden’s 2021 promotion of electric vehicles, which require more than twice as many semiconductors as gas-powered cars, further strained the already backlogged supply chain of microchips, Black said.

Meanwhile, credit card enthusiasts, who are forced to wait weeks, and sometimes months, for their cards to arrive, are voicing their frustrations online.

“We are diligently working to resolve the issue with our card vendors,” reply many credit unions and banks, which can do little as they await their own deliveries of chip-enabled cards.

photo credit: Flickr