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Chip and Pin cards? 'Like'!

The emergence and rapid proliferation of chip and pin cards across the globe is not a surprising phenomenon. These cards were first introduced in Europe and rapidly spread to Asia but have just entered the US, which was slow to embrace this technology.  Replacing the magnetic strip technology that was in vogue, smartcards, as they are also known, contain a microprocessor chip, which provides a hard-to-crack security environment, which encrypts data differently for each transaction. This makes it hard to clone and effective in preventing fraud. Another difference between this card and the one with the mag strip is in the process at Point of Sale.  Chip and pin cards are inserted into a terminal that asks for a pin or prints out a receipt for signature.  Pin technology is widespread in Europe, but many card issuers are still debating the need for a pin versus signature authentication. Whatever the outcome, chip and pin cards are here to stay.

However, a lot more can be done on the security front, like storing card holders' biometric information, such as fingerprint, iris or voice data. Such measures could help counter fraud in CNP (card not present) transactions conducted over Internet, telephone or mail.  What this technology can also do is downsize the card to thumb size, because that's all the space an embedded bit-sized chip needs. When that happens, people will take their card out of their wallet and wear it around their neck!

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Comments: (3)

A Finextra member
A Finextra member 10 September, 2012, 11:22Be the first to give this comment the thumbs up 0 likes

Chip itself measures 5x5mm or less. Some cards (e.g. MFF SIM cards for M2M) are already 5x6mm.

With "contactless" cards you don't need to take them out of the wallet (let alone wear them on your neck - but "wearable" form factor is a sound proposition indeed).

Biometrics et al does not combat CNP fraud IF your card cannot "talk" to your issuer.

Anuradha Mallya
Anuradha Mallya - Infosys Technologies Limited - Bangalore 11 September, 2012, 06:03Be the first to give this comment the thumbs up 0 likes

Innovation in cards technology is  growing in leaps, not in steps. If this is the good news, even more better is that the innovation is helping not just the issuers and banks but also card-users. Post introduction of chip, Card frauds in France have fallen by 80%. Fraud losses in UK too decreased by 40%. The bottom line is that there is a rush to adopt the technology – whether fuelled by convenience, value or  the Oct 2015 deadline!

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 12 September, 2012, 11:33Be the first to give this comment the thumbs up 0 likes

Can you throw more light on how chip-and-PIN and biometrics cards can counter CNP fraud?