HOW DO CHIP CARDS WORK? (Credit Card)

For most of our purchases we usually use credit cards which have magnetic stripe that stores the data inside it.

so when you swipe your credit card or debit card in a swiping machine , your card just sends the stored card number and expiration date in an insecure manner , so it can be quite easily stolen by hackers in a variety of ways and can use your card at best to waste your money and at worst can buy some illegal things which can get you in trouble and most skilled hackers can inject malware into these purchase systems as well as ATM's main databases and can steal card numbers as well as pin numbers. Best example is recent hack on Indian bank systems like SBI, ICICI, in October 2016.

And there are more secure cards that contain small chip on it; these are referred as EMV cards. What these cards do is, they send a random generated token that is valid for that transaction only and cannot be used later.

 These encrypted tokens are decrypted by the terminal. The terminal can use encryption keys to get your account information and can validate your transaction. so even if a cyber criminal gets that token it is of no use....

 Since these codes are one-time usable, And even if you lost your card it is impossible for an attacker to clone your card.

Even if he uses your original card he had to know the PIN.

But we cannot stop him by simply using your card number for online purchases, don't worry today’s systems are more secure and they require OTP for authentication.

You must be very careful and shouldn't tell any of your details to unknown persons and never ever trust who asks your details and pin on a phone call or message, no bank asks for pin or card number.