Chip Card Readers

[AngiTN]

It's more secure because the chip is (as of now) impossible to clone. With magnetic strips, all people needed to do to clone your card was capture the track data on the card (via skimmer, USB card reader, etc), or even just write down your card number, expiration date, and CVV/CID with pen and paper. Many fraud stories involved waiters/waitresses at sit-down restaurants - since the card is typically out of your sight for a time, they could do any one of the aforementioned things to steal your card info. Then once they had your info someone could easily create a duplicate card or just use the info for online purchases.

With a chip card this is no longer possible since the chip constantly creates dynamic codes for auth and approval. If you've ever used a security "token" (RSA SecurID or the like) to VPN into your work network, this is a similar concept for credit cards.

You are right though, that chip and PIN would be the most secure, and it's a point of contention why the US went to chip and signature rather than chip and pin like most of the rest of the world.

I do understand how the chip stops someone from making a fake card.
I don't understand how the chip stops someone from using the card if they get it and it still allows someone to use it for online purchases, no?

 

[KrazeeK120]

Maybe they have so many using MB instead of Credit Cards isn't not a priority?

I do think that many (maybe even most) people who have MBs use them for purchases.

But Disney has lots and lots of day guests. I don’t have specific sources, but it wouldn’t shock me if there were more day guests in any given park than on-site guests (particularly at MK). Those people don’t have MBs to use.

I think Disney probably does do quite a few credit card transactions every day.

 

[erionm]

I do understand how the chip stops someone from making a fake card.

The chip itself is virtually impossible to clone. The magnetic stripe is the weak spot on credit cards. If you try to use the magnetic stripe on a chip card in a CC terminal in which the chip reader is enabled, it will reject the transaction.

The issue with Chip cards in the US is that the card issuers decided to go with Chip & Signature instead of Chip & PIN. There is virtually no real verification of the signature by the CC network for in store transactions. With Chip & PIN, they would need to key in the PIN before the in store transaction will be approved.

I don't understand how the chip stops someone from using the card if they get it and it still allows someone to use it for online purchases, no?

It won't and it doesn't anywhere in the world.

 

[AngiTN]

The chip itself is virtually impossible to clone. The magnetic stripe is the weak spot on credit cards. If you try to use the magnetic stripe on a chip card in a CC terminal in which the chip reader is enabled, it will reject the transaction.

The issue with Chip cards in the US is that the card issuers decided to go with Chip & Signature instead of Chip & PIN. There is virtually no real verification of the signature by the CC network for in store transactions. With Chip & PIN, they would need to key in the PIN before the in store transaction will be approved.

Right. As I said, I do understand how it makes it hard to clone. I don't understand how it prevents any other fraud, including using it online if the write down the info at say, a restaurant.

 

[buzznina]

The Europeans implemented it correctly enforcing the PIN option, that is where the security is. Here in the US, the banks conformed to the lazy people that would moan about having to key in a PIN all the time and trying to remember it and on and on... I here this all of the time at my work from our customers with their online accounts.

 

[erionm]

I don't understand how it prevents any other fraud, including using it online if the write down the info at say, a restaurant.

The chip is strictly for card present transactions (card read by physical cc terminal). Card not present (includes internet transactions) will always be subject to fraud.

 

[ParrotBill]

The chip is strictly for card present transactions (card read by physical cc terminal). Card not present (includes internet transactions) will always be subject to fraud.

Yes. We do need all merchants to get their act together and chip enable...... which means stop accepting swipe cards which are easy to counterfeit. The main issue with Disney not being converted is they are liable for fraudulent purchases instead of the bank since the deadline.

But as long as we use the present card not present system for purchases on the phone and on the Internet, fraud will run rampant. We have to convert to a secure pin and one time use methods so that the present three pieces of information are not sufficient to make a purchase. Worse, some merchants do not require the CVV number so you need only the card number and expiration date.

One reason the Europe system is good is that rarely does the card leave your hands. Waiters bring a portable reader to your table, you insert card, transaction is done. They don't walk away with your card. That is an opportunity to write down all your card info and sell it to crime rings.

 

[sam_rogers]

Right. As I said, I do understand how it makes it hard to clone. I don't understand how it prevents any other fraud, including using it online if the write down the info at say, a restaurant.

Unfortunately chip can't prevent this but as a pp said, in the UK and I'm sure elsewhere in Europe too, waiters normally bring the card machine to you so the card doesn't leave your sight. Most UK banks allow you to set up an online verification so if you use your card online, you have to input certain letters of your password which changes each time and can only be set up if you have additional information such as date of birth of the card holder etc. At least the USA hasn't got contactless card payments yet! In the UK, for transactions up to £30 most cards can be charged by just tapping the card on top of the machine with no pin or signature required, so easy to have fraudulent transactions!!

 

[erionm]

At least the USA hasn't got contactless card payments yet!

It's available in the US with select credit cards. My Costco Visa Card from Citibank is contactless.