How a Credit Card Chip Works to Keep Consumers Safe
Credit and debit cards with chips are the standard for security these days. If your card was created in the last year or so, it’s very likely you have a chip.
You can still swipe your card at most establishments, but most places offer the option for you to use your chip if you’d like. What are the benefits of using the chip, though, and how does it work?
We’re going to discuss the function of a credit card chip in this article, giving you a better idea of what you’re doing when you use your card.
The Credit Card Chip: How Does it Work?
In order to appreciate the value of the chip, it’s important to acknowledge the flaw in traditional cards.
Traditional credit cards that swipe operate through the use of a magnetic strip. The information from your card is pulled from the strip’s magnetic field and matched against your current bank account information.
The process is complicated, no doubt, but it has proven to be easy to hack. Taking credit card information is as simple as creating a skimmer. This is something that hackers will connect to a card reader of some kind.
The skimmer takes information from your card when you swipe and sends it back to the person who wants your money. It seems complicated, but it’s certainly doable by a lot of people.
It’s also a cheap and effective way to take someone’s money. The chip operates a little bit differently.
How the Chip Protects Consumers
EMV cards, also known as chip cards or smart cards, are home to technology that makes it nearly impossible for someone to steal your information when you use your card.
While old cards had static information, EMV cards contain data on integrated circuits that change encryptions and codes each time you use them. Integrated circuits allow access information to change constantly, making it extraordinarily difficult to take and use information.
Whereas other cards could be hacked by someone with relatively little knowledge about data security, hacking a chip is another operation entirely.
The equipment needed to hack your card information is likely worth more money than you have in your bank account. Unless you have millions upon millions in that account, the juice isn’t going to be worth the squeeze for hackers.
Plus, as we’ll see next, getting into your accounts through the chip is almost impossible.
Sophisticated Encryption Technology
One of the ways that EMV cards protect your data is through an ever-changing encryption process.
Each transaction is assigned a specific code that can only be used once. In order for a transaction to go through, the code has to be correct. The chip technology and chip readers communicate with each other during transaction, ensuring that the information as all correct.
This means that if someone were to steal your information at one transaction point, they would only have the code and encryption information for that single transaction. The information they gathered wouldn’t be applicable to future transactions at all.
Other Things to Consider
While new card technology is effective at keeping users safe in stores, there is still a whole host of other ways to have your information stolen.
You aren’t immune to fraud or hacking just because you have an EMV card. Shopping online is still just as dangerous as ever, and you have to be cognizant of that. Chips are designed to encrypt information and communicate with card readers in a way that is extremely private, but this process has no bearing over what happens online.
In fact, the wave of sophisticated chip technology has driven hackers and other cyber-criminals to set up shop online instead of in stores. While in-store fraud has declined, online hacking may be where thieves are finding their niche.
Staying Safe Online
Protecting your information online is not as difficult as it may seem. It isn’t as if there’s a huge risk of losing data whenever you shop. What matters is that you use common sense and do your research before shopping with on new sites.
Take advantage of online reviews of stores and make sure that the reviews given are from actual people. Typically, the volume of reviews is a good indicator of the company’s safety. If there are three reviews that only give praise, be careful.
If there are thousands of reviews of different kinds, you can be confident that it is a site people use without losing precious data.
Further, you can safeguard your information by refraining from shopping or using credit card information through public wifi connections. Keep up-to-date with software downloads for your phone and your computer as well. Updates are sent out for a reason, and that reason is often something to do with security.
Finally, don’t ever fall prey to a phishing scam. These scams involve someone reaching out to you, baiting you, and eventually stealing information. You can even be phished by clicking the wrong link embedded in an email.
If something seems sketchy to you, especially an email or promotion, don’t click it.
Still Not Convinced about Card Safety?
While security measures are the best they’ve ever been, some people may not be convinced that credit cards are safe enough to use.
There are other ways to access money in a pinch, so you aren’t out of luck. You can think about taking out a personal loan to access money, but that can take more time than you have.
Take a look at some of the payday loans pros and cons if you’re in need of extra money fast without using a credit card. Payday loans give you a reliable option to get money quickly if you’re in a pinch.
Want to Learn More?
Hopefully, this exploration of the credit card chip helped you understand the concept a little better. There’s a lot more to learn, though, and we’re here to help you move forward.
Explore our site to get the technological information you need to stay in the loop.