More and more card readers at POS terminals now support tap to pay means of making a payment. If we are not inserting the chip end of the card, how is it providing additional security?
Edit: wow, lots of great information, thank you folks for taking the time and explaining it like I’m 5.
In: 197
The chip essentially has a small math equation built into it. For simplicity sake, let’s say that the equation is x5 +10 /2
Every card has a unique equation on it. The equations are really way way more complex than my example, but the concept still works.
When you plug in your chip, the card reader machine presents a number, your chip runs the equation and spit out an answer. Using the equation above, the card reader might present the number 6. 6 times 5 is 30, plus 10 is 40, divide by 2 is 20.
Importantly, the card reader machine doesn’t see any of the equation. The card reader only sees “I said 6, card responded with 20.”
Each card’s chip has a complex and unique equation, so there is only 1 card in existence that will provide that exact response. The bank knows your secret equation, so they can verify that your card was used. But no one else knows that equation, so they can’t try to steal your identity that way.
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