Understanding chip and pin machine

Understanding chip and pin machine

The introduction of the chip and pin machine was hailed as a massive step towards card safety. Before this new introduction, cases of card fraud had been on the rise with authorities scratching their heads trying to figure out how to protect card users. Now everyone can breathe easier as the cases of card fraud have reduced significantly over the last several years.

Although there are other ways that pin numbers can be stolen, the chip and pin machine definitely prevents a case of those pin numbers being subsequently used through card cloning. A chip and pin machine will not allow access to a card that has been cloned.

Chip and pin is now nationwide

The enhanced security of the chip and pin machine is what made the UK government decide to do a nationwide rollout of this project. That was over 10 years ago. Although card payments were still common before then, the process of signing for transactions was tedious and prone to fraud. National roll-outs are never easy but it is fair to say that the government was quite successful with this one. Now the chip and pin machine is used nationwide with cards also having undergone changes to meet the chip and pin requirement.

How a chip and pin machine works

A chip and pin machine is a small device that has a keyboard, a card slot and a small screen. Occasionally, you might come across a chip and pin machine that has separate keypads.

Inside the chip and pin machine is a card reader that reads both the chip and the pin. When a card is slotted into the machine, and the 4-digit pin is entered, the card reader then reads the chip and determines whether the cardholder has sufficient funds for that particular purchase. If the funds are not sufficient, the payment is rejected on the spot.

A chip and pin machine also accepts contactless payments as long as the machine is equipped for it. The customer then has the right to decide the best chip technology in his or her phone.

A chip and pin machine works offline

Another important benefit of a chip and pin machine is that you can use it offline. It means that you will still be able to accept payments during times when the internet is slower or phone signals are weaker.

This is a great departure from the magnetic strip card which required on-the-spot authorisation from the card merchant provider. With a chip and pin machine, there is a provision for transactions to be stored on the machine’s terminal and then transferred at the close of business.

The chip and pin machine and EMV compliance

In today’s virtually fully EMV-compliant market, chip and pin cards are the only card that is universally accepted. This means that the chip and pin machine will continue to be an important part of card payments in the foreseeable future. This also means that chip and pin cards will continue to be issued in all banks in order to stay toe to toe with the universal EMV standard. There is no doubt that card payments have come a long way and will continue to evolve as years go by.

Chip and pin machine