So I've looked at various articles trying to understand how chipped credit cards increase security over traditional credit cards.

In the times I've used my card with a chipped reader (wally world, target, etc) I've scribbled a half legible signature and walked away. I could just easily give my wife my card and have her scrawl a similar mess when she checks out. More importantly, if I were to lose my wallet, someone could probably get away from writing in "Thor, god of thunder and bad ass" on the receipt. When physically using the card, I can't think of any protection that the chipped card serves that the magnetic strip card does not, because anyone can use it, regardless of if the card information is encrypted between the machine and the auth servers.

When using the card online, I just enter numbers. I fail to see how the chip protects my card against the usual vectors of credit card theft (if either my computer or the billing server is compromised)

About the only thing I can see chipped cards protecting against is compromised scanners. If the encryption is done on the card, then the compromised scanners never see the actual credit card data. The thing about this is that I'm not sure compromised scanners are the major issue in credit card security. It's take a pretty daring person to try and swap out a scanner at a checkout line, and unattended scanners typically have anti-tampering stickers on them.

So, given the presumably massive cost of rolling out chipped cards in the united states, what do they actually do to improve security?

  • 1
    The rest of the world uses chip+PIN, which is a lot more secure because it's two-factor auth (something you have - the smartcard chip in the card - and something you know - the PIN) and a card thief wouldn't know the PIN. But yeah, chip+signature is just stupid, especially since nobody checks the signatures. web.archive.org/web/20101203193031/http://www.zug.com/pranks/…
    – CBHacking
    Commented Oct 14, 2015 at 22:04
  • 2
    In places where chipped cards have been fully implemented, signatures and magnetic transactions should no longer be accepted.
    – Lie Ryan
    Commented Oct 14, 2015 at 23:14
  • Chip+PIN increases security. Chip+Sig is not different from a magstripe. I have never, ever seen Chip+Sig, I have only used Chip+PIN (I'm in Canada and travel to Europe).
    – schroeder
    Commented Oct 14, 2015 at 23:28


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