Back in 2016, the Reserve Bank of India had instructed banks to shift to chip-based cards – both debit cards and credit cards. In doing so, it compared the difference between Point of Sale (POS) terminal infrastructure to that of ATM infrastructure. It even gave the banks a deadline till September 30, 2017 to make the shift. Banks being banks, they did not care for quite some time. However, they care about it now. Today, whenever your bank encounters a debit card-related query, it asks you to opt for a chip-based debit card. We suggest you to not wait for such time and ask your bank to provide you with a chip-based debit card right away. Do you want to know why? Then read on.
Chip-Based Cards: The Big Advantage
We all know how to use the magnetic strip-based cards, so much so that it has become second nature to us. Little do we realise that this magnetic strip on our card is the reason why our money can be stolen. How? The magnetic strip of a regular card contains data that is static. Every time this card is swiped, your details are shared along with a transaction code that stays the same. If a person copies these details of your card and knows your PIN, they can carry out as many transactions as they want with ease. How will they get to know your PIN? For that answer this: how often do you go up to a restaurant’s desk to pay your bill instead of asking them to get the card machine at your table?
Imagine the same scenario, only now you have a chip-based card. Chip-based cards keep changing their transaction code and hence, even if somebody copies your card details, they cannot simply steal money. After all, at every transaction, a chip-based card will change the transaction code. However, with the copying of card details, there will only be one transaction code for all later transactions. As soon as an unauthorised person uses your details for a purchase, the transaction will be declined due to previous transaction code’s expiration.
Chip-based Cards: Slightly Hesitant
What’s more is that if you pay attention, a chip-based card is never swiped but always dipped in the machine. This is because machines read the chip of such cards for transaction-related details instead of the magnetic strip. Surely, this process takes longer than swiping a card as the chip and the bank exchange details via the machine. Due to usage of chips in cards, today you can also opt for cards that have NFC capability. In case of such cards, you would not even have to dip them in the machine. All you have to do is tap the card against the machine and all the card and the machine will exchange details wirelessly.
Chip-based Cards and User Responsibilities
One important question to address here is what if the machine does not accept a chip-based card? Currently, banks offers chip-based cards that also have magnetic strips. So, you can still complete your transaction without having to worry about your card’s acceptance by a merchant. However, this does not mean that you responsibilities reduce in any way. Below are your responsibilities as a card holder:
- Never share your account details, card details and PIN with anyone
- Change your PIN regularly
- Always enter your PIN yourself for a POS transaction, be it at a grocery store or a eating joint
- Never share any OTP received with anyone over phone