Chip Pin Credit Cards

It’s been more than 2 decades since credit cards were introduced in India. It has given various card issuers a tough time to call it a stable base in India. However, things have changed in the recent past with the Gen-X choosing plastic as a favored mode of payment. Things have also changed with elder generation group also adopting(though slowly) to plastic wallet.

With all graphs showing spikes, fraud has been rising as well. Credit card companies and other financial institutions involved with plastics have been trying very hard to counter fraud. Traditional mag stripe credit cards being more susceptible to fraud with high chances of cloning and altering; companies came up with Chip Pin concept in early 1990s and it is said to have reduced fraud considerably. France reportedly reduced fraud by 80% since the introduction of Chip-Pin cards in 1992.

So, what are know-how of Chip-Pin Cards?

  1. What : A Chip-Pin card is a standard credit card with an additional chip on it. This chip is used to store information.
  2. How Is It Used: After making contact with swipe machine, it will ask for a PIN that’s secret to user and he’ll have to enter the correct PIN for completing a successful transaction. There are some other variants where swipe is followed by the standard signature and this is known as a Chip-Sig transaction.
  3. Why : Chip Pin cards are much safer with much lesser chances of altering and cloning. They provide an extra authentication level that adds security to entire transaction process.

The Chip-Pin card started first in Europe and was recently introduced by american express in USA as well. As for India, RBI was considering a transformation to propose roll out of Chip Pin Cards in India. Chip-Pin-Cards-India . RBI has also said that by June 30, 2013, banks must issue EMV chip and PIN-based credit/debit cards to customers who have made at least one purchase using their debit/credit card in a foreign location. I have seen these types of cards in a few hands; however i am not sure of companies issuing these and how many merchants are capable of accepting these cards. These cards are certainly safer as compared to traditional ones and if possible one must try to get these issued.

Update : 02-Jun-2013 : Citi Bank has started issuing Chip-Pin cards in India.


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