How secure is your credit card?

Credit cards have become an integral part of our life, but concerns about its security and vulnerability is an ongoing issue. Credit card frauds are rising at an alarming rate. Card associations and banks on the other hand have been trying hard to enhance card security features to minimize frauds and misuses.

Here is a look at the security features introduced by card issuers and banks in the current scenario.

Verified by Visa/Mastercard SecureCode

A significant upgrade in credit card security features came with the introduction of 'Verified by Visa/MasterCard Secure Code programme' or second factor authentication. It addresses the credit and debit card transactions over internet.

Earlier, to do an online transaction, the only information needed was your credit card number, expiry date and the CVV number printed on the back of the card. It is easy to obtain this information as they are exposed when you handover your card at hotels, shops or petrol stations. Fraudsters can use this data for online transactions where physical presence of the card is not needed.

With the introduction of the Verified by Visa/MasterCard Secure Code programme, apart from card information, the customer needs to provide an additional password like that of a debit card, to make the transaction secure. This is to authenticate any online transaction.

EMV Chip

The EMV chip addresses security concerns while the card is physically swiped in a machine. When cards are being swiped on an electronic device, all the information stored on its magnetic strip gets extracted for verification. Fraudsters can extract this data from swiping machines and use them to make a duplicate card through a process called cloning. This duplicate card can be used for online transactions and your credit account gets billed.

The susceptibility of magnetic strip cards forced the card associations to come up with an innovative solution - the EMV (Europay, MasterCard and Visa) chip. It stores the data securely in a highly encrypted format which is difficult to skim off and thereby reduces the chances of extraction. It also relies on a digital signature scheme based on public key techniques to confirm the data's legitimacy. As the transaction is being processed, any tampering or unauthorised alteration of data is detected and the transaction will be declined.

India is slow in adding this security feature. In India, the card acceptance mechanism at many merchant outlets is still not equipped with the process. So, the Indian card manufacturers need to issue cards with both EMV platform and magnetic strips. The card makers ensure that the new cards will have a magnetic strip, but the card's confidential data will be stored on the chip. The magnetic strip facilitates the transaction where EMV processing is not available and at the same time data will not be skimmed.
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