It became a standard in the fin tech industry to issue plastic cards with an embedded chip that will golf encrypted data and communicate this data with chip readers in a sophisticated matter that will make it harder and almost impossible for skimmers and other hacking devices to sniff the data and steal financial information.
What is a chip in a debit or credit card?
If you pull your wallet and look at you debit or credit card you will see the chip on the front of the card, this is a microchip embedded in the card, it is supposed to encrypt the information to increase security in financial transactions.
This technology became the standard in the industry and adopted by MasterCard Visa and Europay systems and will work worldwide wherever they are accepted. It is worth noting that not all readers are equipped by chip reading technology. The call it EMV chip after Europay MasterCard and Visa
These EMV chips are basically micro computers and they have the capacity of the computer that landed the first man on the moon.
The chip is programmed with a software to communicate with the bank host terminal to conduct financial transactions.
You will also notice that the magnetic strip is still on the cards to accommodate terminals that don’t support the technology however you will still have to enter your personal identification number PIN to complete the transaction.
Chip technology will reduce fraud but will not prevent a data breach however the technology built in the chip is very advanced that it will detect suspicious transactions in which case the user will be contacted to confirm a transaction that is deemed suspicious once it is verified it will be released otherwise it will be stopped and a new card with a new chip will be issued, that’s why financial institutions encourage their card holders to keep their contact information up to date and enable alerts to receive prompt Push notifications on their smart phones, text messages or call to notify them whenever there something out of the usual happens.
Microchip Fintech is in peak time and this is only the beginning of how we will be conducting financial transactions.
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