Chip ‘n’ PIN

I received my credit card today. It was one of the new ones with a chip ‘n’ PIN. This means, according to proponents, that it is more secure that its predecessor. Well, there is something in that, I suppose. My signature could be forged should someone steal the old one. They could not, however, forge the PIN because that is inside my head. So, for a quick spending spree around the local shopping mall before the card is identified as hot, a loophole has been partially closed. I say partially because there is nothing to stop enterprising criminals coercing the PIN number out of their victims.

That said, it is only one area that is being closed. What about E-commerce, as David Norris points out in The Register, today? Aha, there’s the rub. If you want to buy something over the Internet with your stolen card, all you need is…well, what’s on the card. That’s it, as, indeed, David Norris points out,

the big explosion in crime at present is to intercept cards in the post! That ensures you have all the data you need, to buy what you want.

The other point he makes is that for this insecure method of cash handling, the banks charge merchants 1.5%. What do the merchants get for this? Er, well, they get their money less 1.5%. Fraud risk is something they have to underwrite themselves. Well, big fat hairy deal.