New research suggests there are holes in the new credit card chip technology companies are making consumers use. We are sure many of you received an updated credit card in the mail. The card looks practically the same except for small chip on the end of the card. When you go to check out, you insert the card into the machine. Some chip enabled cards even require a pin. These chips are meant to be safer for banks, credit card companies, and consumers. However, studies show that the technology isn’t perfect.

NCR, a corporation that makes payment terminals and ATMs, recently showed that it is possible for criminals to steal money from chip cards.

According to VIPRE, this is what NCR presented:

“The researchers used cheap computers to insert themselves into the communication channel between a store’s cash register and a payment module (a PIN pad). In general, communication between the two systems is encrypted, but in many cases the encryption is weak — giving criminals the opportunity to intercept data and decrypt it.”

Criminals can’t hack your PIN code, which is encrypted and never transmitted openly. However, hackers can obtain other information from a chip — like your name and card number. This information is typically written in to the magnetic stripe on your credit card.

To make a payment criminals need the CVV2 or CVC2 code from the back of the card. This information is kept hidden during data transmission. Criminals are trying to trick consumers in to giving up that information by breaking the channel of communication during a transaction.

Two Ways To Protect Your Chip:

  1. Never enter your PIN twice in a transaction. If you see an error message that asks you to re-enter your pin, cancel the transaction and start over. If the error message persists, pay with cash or abandon the transaction.
  2. Research alternative ways to pay. Services like PayPal, Apple Pay, and Samsung Pay. These services use their own separate encryption to protect your data. There is no card used in a transaction. It provides an added layer of security to your transactions.

As technology continues to advance so will the threats to security. The chip technology was designed to improve security at point of sale. Although the technology is not perfect, it is another layer hackers have to get through to steal your information.

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