Problems with Chip and Pin

Problems with Chip and Pin

Though Chip and Pin comes with benefits, but it still is not foolproof and also creates some problems for individual handling. The biggest problem with chip and pin is that you will have to key in your PIN no. at every transaction, be it buying a beer in the pub, shopping at Tesco, Sainsbury or Asda, or withdrawing money from any ATM or cash machine. Since you have to key in your pin every time, it means that you are prone to your pin being revealed to people standing nearby.

For e.g., shopping at stores like Tesco and Asda are very much susceptible to revealing of PIN. There is a long queue of customers behind you. While you key in your pin, it is possible that someone might see your finger movement.

Another problem is that stores usually have cameras installed at the payment counters. They can easily capture your finger movements while you key in your PIN. However, in countries like Netherlands, superstores like Albert Hein have a shielded cover to hide the PIN pad, hence it secures the PIN no. while entry. The same can be followed in UK as well.

The customer is responsible now:
One of the major setbacks of implementation of chip and pin is that the liability is now given to the customer. Imagine someone robs you of your card on a lonely street and beat you to ask your pin no. By the time you file complain, the robber may use your card to withdraw money, make an expense or shop around with your card. The banks issuing the card just finish off with their liability the time they give you your PIN No. It becomes the customers responsibility for all the transactions that have taken place, as he is the only one suppose to know about the PIN.
It also makes it hard for the customer to prove his innocence in case of fraud, as he is the only one suppose to be responsible for the PIN and the card.

Here are some stories of credit card frauds

Here are some stories of credit card frauds:
· Resellers liable for fraudulent transactions (BBC News)
· The story of how French smartcards were cracked back in 1999 (multiple sources)
· Hackers succeed in cracking Siemens digital card signature (The Register)
· Card Confusion (IT Week)
· The Dangers of Identity Fraud (Credit Card Magazine)
· Market Comment (Yahoo Business)

Especially for elderly people, it may sometime become inconvenient and embarrassing if they forget their PIN no. while paying for shopping at a retailer or at a restaurant. They are required to remember the PIN, while initially they were only required to sign on the paper receipt.