Chip and Pin was first trialled in Northampton, UK, in 2003. It was used to replace the "swipe" method, this was because "swipe" cards didn't need another security check, so any person could use the card (for example; criminals). The Chip and Pin method requires the user to enter their own personal four-digit PIN code, the user of the card must know the PIN card to carry out the transaction. The user has 3 attempts to enter the PIN correctly if it is entered incorrectly, if they fail all 3 attempts, then the card is blocked and the user must visit their local bank.
The whole concept of Chip and PIN reduces the need for cash when shopping, it is also much quicker as a transaction because the till operator doesn't need to count change. Another feature is the "CashBack" option that allows account holders to take money from their account with their transaction. The other benefit is that some cards can be used abroad, this reduces the need to change currencies for cash at a bureau de change or airport, however some banks charge customers when using this feature.
 |
| A Chip and PIN card reader. |
Companies that use card transactions in purchases have to pay a transaction handler to ensure the transaction occurs, this can be costly in the long run. Most companies get around this by making sure that customers can only use card if they spend over a certain amount of money, for example £3.00
 |
| The cost (from Barclaycard) to take card transactions at a business |
Advantages:
- It is much safer than the old "swipe method". This is because users need to type in their PIN code, a form of identification verification.
- It reduces the need to carry cash, this means that the customer and till operator doesn't need to physically count the amount of money that needs to be given for the transaction.
- It is more efficient than paying by cash, the transfer occurs quickly and no change needs to be given (unless the customer requires cashback).
- It can be used for online transactions (unlike cash). Users enter their bank details and can easily carry out a transaction from the comfort of their home. The user's reciept is sent via e-mail.
- It can be hard for the elderly to remember their pin number, this can cause many cards to break and hard for the elderly to access their money. Criminals could take advantage of this.
- Criminals will find ways around it, by cloning cards, or simply finding out the pin of the card. There is no completely safe method.
- If there is a power failure/telephone wire disconnection, then transactions won't be able to occur. This means that companies will lose out on sales and customers.
- If a user has a credit card and a debit card, then they must remember two different pins, this could increase the number of errors, unfortunately this could lead to cards getting blocked. This can then take time to replace/fix the card.
News Articles:
http://news.bbc.co.uk/1/hi/technology/3039619.stm
http://news.bbc.co.uk/1/hi/programmes/moneybox/3717331.stm
No comments:
Post a Comment