Why You May Soon Be Seeing Yet Another New Chip in Your Credit Card
by Patty Gallagher
When it comes to finances, concerns about privacy and security are not always top of mind for consumers performing a common action like making a purchase. And maybe they should be, since today’s customers frequently shop using plastic—most commonly a credit or debit card, which can be directly linked to their bank accounts. Trusting customers swipe their cards and type in their PIN numbers not realizing that their transactions, which contain their personal identification information, might not be secure.
Following the theft of millions of customers’ information in 2013, when a major data breach at Target affected 40 million customers who had used their credit or debit cards between Nov. 27 and Dec. 15, banks and credit card companies decided to increase the level of security for credit and debit card users by installing a chip into each card.
This chip, called a radio frequency identification (RFID) chip and installed in EMV cards, or cards that meet the international standard of chip security and technology, produces a one-time code for each transaction. The card number is not recorded, as was done in the past—just the transaction code—reducing the ability of thieves to obtain card information.
Yet, as with any security technology, hackers have found ways to undermine the RFID chips by studying the radio frequency used and the fluctuations in the chip’s power source, scanning and then rewriting the chips to reflect their own data.
So, now what? Well, according to an article published by Science Daily on Feb. 3, MIT and Texas Instruments researchers have developed a new RFID chip that is almost impossible to hack. This newly designed chip will circumvent hackers by providing a power source within the chip (to mitigate any fluctuations in power) and memory cells that retain the information the chip is processing at the time the chip begins to lose power. As the chip will remember the data it was processing, hackers will not be able to rewrite or reroute the chips to reflect their own data.
One downside of this newly developed secure RFID chip is that it will mean longer checkout times for the consumer, as the chip will have to power on and store the data being processed every time the chip is activated.
In an era filled with constant threats to credit and debit card security, these technological advancements couldn’t come at a better time. While the level of privacy expected by bank and credit card customers may not have changed, the lengths to which financial companies have to go to secure personal information has undoubtedly increased. As hackers become more proficient at stealing personal information, banks, including The Milford Bank, will continually seek new ways to protect their customers. As new technology is developed and rolled out, we’ll keep you posted!