Do chips make credit cards safer?

Credit card companies and the news have been touting the new chips for several years now.  I remember getting my first chip card, and it just looked like a sim card sitting in the middle of my card, but kind of cool.  It never made any difference, because all the stores were just using the magnetic swipe strip.  The numbers were still written clearly on the back of the card.  In Italy businesses used the chip technology a few times, but I never understood why all the fuss.  Over the last few years, my cards have been slowly “upgraded.”  New cards shows up in the mail with instructions to activate and destroy the old card. I have very few remaining magnetic strip only cards left.  The merchants have slowly upgraded as well.  There are a times when I insert the card, and their system is not ready, but most vendors have converted.

Comparison to Viruses

So, do chips make credit cards safer?  This question reminds me of a concept I taught as a biology teacher. Strangely the concept was:  “Why are viruses difficult to fight?”  The difficulty in killing viruses is due to their simplicity.  Virus only contain 2 parts: the protein capsule and DNA center.  When fighting viruses there are only two targets.  The choices are either you attack the protein or the DNA.  A car would be much easier to disable.  I could sabotage the gasoline, wheels, spark plugs, keys, glue the doors shut, or put a banana in the tail pipe.  Hell, I could just fill the interior with concrete.  Virus are difficult to attack because they only have 2 targets.  Cars have many weaknesses, because they have lots of parts.

If this analogy is applied to credit cards, the results are not comforting.  Old school cards had two targets.  A thief could steal the numbers, or record the magnetic strip.  By adding a chip, thieves now have a third target, and could employ a chip reader gizmo, in addition to the old methods.  I am not a security expert, but adding new ways to access information from a credit card makes it less secure, not more secure.

European Cards

The chip was used in Europe long before it came to the US, but they use a different system.  In Europe the chips come with a pin.  The chip/pin system requires a 4 digit pin to be entered to access the chip.  I remember an Italian guy at the hotel desk in Rome being surprised when my receipt began printing as soon as the card went into the reader.  He was expecting it to wait for me to input the pin, but my American card was only chip, not chip/pin.

Changes at Kroger

Over the years, I have bought a lot of visa gift cards, in order to hit bonuses for credit card spend.  I routinely went through the same Kroger self-check out, at the same time each morning.  I would be prompted by the kiosk to show my credit card and ID to the same cashier. The cashier knew me, stopped checking my ID, but she still needed the last 4 digits off of the credit card to make the system begin processing.  She used to complain that she could never remember my 4 digits.  For some unknown reason because I am mean, I never told her that I switched cards frequently.

Anyway, once Kroger upgraded to the chip readers, the system stopped needing verification from the cashier.  I find it scary that I can take a chip enabled credit card into Kroger, and buy a $500 visa gift card without any kind of authorization from the cashier.  There is no picture ID, signature match, or pin check.  No hassles, and I am out the door with $500 dollar gift cards.  This issue may be more of a problem with Kroger policy, but the policy change coincided with the chip enabled cards.

So does the chip make me feel safer?  I am going to have to answer “Nope.”

Posted in Credit cards.

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