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 U.S., 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!