The introduction of the Chip and PIN system to consumers worldwide has lead to an efficient and fast method of payment transactions through credit and debit cards. Chip and PIN enables card holders to make payments through a secure method that is recognized across the globe.
Chip and PIN explained
Chip and PIN was integrated as an additional security measure for card holders. This method ensured that only the cardholder authorizes all payment transactions, as it requires the individual to enter a PIN code. The PIN code is a four digit personal identification number that is sent to all card holders by their issuing bank. Payment transactions can only be completed once the PIN code has been verified at the point of sale terminal.
The smartcard contains a chip, which is a semiconductor, and is recognized by the card reader. The smartcard carries important information in regards to the cardholder, therefore ensuring that it is solely used through authorization at the POS terminal.
The Chip and PIN method has reduced credit and debit card fraud by more than 80% as it allows only the original card holder to make payments. It is essential that cardholders keep their PIN code safe as this information can give unauthorized users the information to utilize the card. In order to reduce the risk of being a victim of credit card fraud, individuals are advised to destroy the slip that contains their PIN information after receiving it.
In the event that a cardholder’s card has been used to transact a payment without their authorization, the cardholder is able to dispute this payment and file for a chargeback from their issuing bank.