Chip and PIN Credit Card Fraud

Chip and PIN are supposed to help protect us all from credit card fraud. Cambridge researchers, Steven Murdoch and Saar Drimer, have found a number of ways that the criminally-minded could crack it - and extract your account number and PIN and all the details needed to create a cloned card. This is more likely to happen at shady stores where the retail associates is in charge of the store.

Check out the Google Video showing a demonstration of the same. [Reminds me of the FRAUD that had rocked 5-Star Hotels in India, where the Steward would swipe the details of credit card on his cell phone sized instrument and later use the data to go shopping at our expense].

Secure smart-chip credit cards on way ?

We are all aware of the magnetic strip on our credit / debit card. However, with advancement in technology, new smart-chips are embedded into the credit /debit card so that data is stored in an encrypted format and is more secure than your magnetic strip card.

For transitioning all card holders to this new format is a big hassle and also expensive. The transition will involve changing all merchant terminals and also issuing new cards to customers. However, a new format has been setup by Euro-Master-Visa which supports interoperability between smart chip payment cards and terminals.

In India many banks are still talking to agencies such as DEI which prepare consumer credit cards on behalf of the banks. DEI has provided approximately 80,000 merchant terminals in India.

Who knows, Indians may just embrace m-commerce and dump credit cards all together :-)