Moofat
07-02-2006, 02:43 AM
Chip and PIN
From Wikipedia, the free encyclopedia
Chip and PIN is the name of a government-backed initiative in the United Kingdom to implement the EMV standard for secure payments. There is also a similar initiative in the Republic of Ireland called Chip and PIN Ireland.
History
Until the introduction of Chip and PIN, all face-to-face credit or debit card transactions used a magnetic stripe or mechanical imprint to read and record account data, and a signature for verification.
Under this system, the customer hands their card to the clerk at the point of sale, who either "swipes" the card through a magnetic reader or makes an imprint from the raised text of the card. In the former case, the account details are verified and a slip for the customer to sign is printed.
In the case of a mechanical imprint, the transaction details are filled in and the customer signs the imprinted slip. In either case, the clerk verifies that the signature matches that on the back of the card to authenticate the transaction.
This system has proved reasonably effective, but has a number of security flaws, including the ability to steal a card in the post, or to learn to forge the signature on the card.
More recently, technology has become available on the black market for both reading and writing the magnetic stripes, allowing cards to be easily cloned and used without the owner's knowledge.
How it works
To solve this, banks and retailers are replacing traditional magnetic stripe equipment with that based around smartcards, which contain an embedded microchip and are authenticated automatically using a PIN.
When a customer wishes to pay for goods using this system, the card is placed into a "PIN pad" (often by the customer themselves) which accesses the chip on the card.
Once the card has been verified as authentic, the customer enters a 4-digit PIN, which is checked against the value stored on the card; if the two match, the transaction will be automatically completed.
France has cut card fraud by more than 80% using a similar, but incompatible system. Chip and PIN is the name given to the initiative in the UK but countries worldwide are launching their own initiatives based on the EMV standard, which is a group effort between Europay, MasterCard and VISA.
By the end of 2004, 100 countries will be using compatible systems based on this standard, and France aims to migrate its existing systems to be compatible with the new cards.
Note that "cardholder not present" transactions such as Internet, telephone or mail order purchases are not affected by the introduction of the Chip and PIN system.
Since these are also major areas of fraud, other initiatives such as Verified by Visa and MasterCard SecureCode are being developed to improve security in these situations, such as additional security codes printed on the back of the card and more complex authentication services.
From Wikipedia, the free encyclopedia
Chip and PIN is the name of a government-backed initiative in the United Kingdom to implement the EMV standard for secure payments. There is also a similar initiative in the Republic of Ireland called Chip and PIN Ireland.
History
Until the introduction of Chip and PIN, all face-to-face credit or debit card transactions used a magnetic stripe or mechanical imprint to read and record account data, and a signature for verification.
Under this system, the customer hands their card to the clerk at the point of sale, who either "swipes" the card through a magnetic reader or makes an imprint from the raised text of the card. In the former case, the account details are verified and a slip for the customer to sign is printed.
In the case of a mechanical imprint, the transaction details are filled in and the customer signs the imprinted slip. In either case, the clerk verifies that the signature matches that on the back of the card to authenticate the transaction.
This system has proved reasonably effective, but has a number of security flaws, including the ability to steal a card in the post, or to learn to forge the signature on the card.
More recently, technology has become available on the black market for both reading and writing the magnetic stripes, allowing cards to be easily cloned and used without the owner's knowledge.
How it works
To solve this, banks and retailers are replacing traditional magnetic stripe equipment with that based around smartcards, which contain an embedded microchip and are authenticated automatically using a PIN.
When a customer wishes to pay for goods using this system, the card is placed into a "PIN pad" (often by the customer themselves) which accesses the chip on the card.
Once the card has been verified as authentic, the customer enters a 4-digit PIN, which is checked against the value stored on the card; if the two match, the transaction will be automatically completed.
France has cut card fraud by more than 80% using a similar, but incompatible system. Chip and PIN is the name given to the initiative in the UK but countries worldwide are launching their own initiatives based on the EMV standard, which is a group effort between Europay, MasterCard and VISA.
By the end of 2004, 100 countries will be using compatible systems based on this standard, and France aims to migrate its existing systems to be compatible with the new cards.
Note that "cardholder not present" transactions such as Internet, telephone or mail order purchases are not affected by the introduction of the Chip and PIN system.
Since these are also major areas of fraud, other initiatives such as Verified by Visa and MasterCard SecureCode are being developed to improve security in these situations, such as additional security codes printed on the back of the card and more complex authentication services.