Chip and PIN, Will It Save Us?

By: Robert Siciliano  |  December 16, 2014


Many Americans, says a recent survey by Gallup, worry about a data breach connected to the use of their credit cards. Interestingly, many people use a credit card for everything under the sun: even just a soda and bag of chips from the convenience mart. The more you use a credit card, the more likely it will be compromised by cyber thieves.

The magnetic stripe technology for credit cards makes them so “hackable.” One way to help prevent credit card crimes is to implement a chip-and-PIN technology. It’s been touted as a sure way to keep crime at bay. But is it what it’s cracked up to be? After all, how could the thief, holding your credit card, know your PIN?

The magnetic stripe contains account information. This can easily be copied with a thief’s tools such as a skimming device. A chip card uses a microprocessor that’s embedded. This makes the account information non-accessible to a hacker during any point of a sales transaction.

There are additional features to chip technology that tie into keeping fraud away:
• Every time the card is used is recorded.
• A cryptogram lets banks view the data flow.

Chip technology will be coming out in 2015 for the States, and experts are very confident that this transition will choke a lot of life out of card fraudsters. The transition will cost around $8 billion—if done correctly. And this “roll-out phase” won’t happen overnight, either.

There has been credit card fraud involving chip technology. Here’s how it happened: The crooks stole account information from magnetic stripes via skimming. The transactions were then done EMV style, then the criminals picked up traffic from an authentic EMV chip transaction. Next, the thieves put the information they’d skimmed into the transaction, and pulled off their crime.

In short, chip-and-pin technology is not without the element of human error; EMV can still be implemented poorly. As for that human error, this happened not too long ago with Canadian banks. They were struck with a big financial loss because the counter data and cryptograms were not being checked efficiently.

We can have a really great thing here—if it’s implemented in a smart way. What good is an advancement in technology if it’s carelessly employed?

Robert Siciliano is an identity theft expert to discussing  identity theft prevention. For Roberts FREE ebook text- SECURE [email protected] -to 411247. Disclosures.

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