Credit card & security: magnetic stripe or chip?



The credit card can look back on a history of more than 50 years. During this time, she has not only steadily gained acceptance, but also security. Chips and a magnetic stripe determine the image of the modern credit card today.

Interesting facts about the magnetic stripe and the EMC chip

Interesting facts about the magnetic stripe and the EMC chip

The magnetic stripe marked the first major security standard for credit cards. From this grew the typical image of a credit card and its use, namely by “pulling it through” at the checkout. During this step, the data on the magnetic stripe was read out and validated, in the second step the signature was compared manually.

For a long time, the use of the credit card was primarily determined by its security mechanism, which has changed step by step since the 1990s. In this decade, the EMV chip was born, which is primarily a European invention and consequently was particularly well received within Europe.

Although it has been integrated into American credit cards over the years, becoming the absolute standard like the magnetic stripe before, it has not (yet) advanced. In some cases, American credit card operators even skipped the EMV chip and instead switched to the NFC chip.

Advantages and disadvantages of chips and magnetic strips?

Advantages and disadvantages of chips and magnetic strips?

Both the advantages and disadvantages result from the technical limits of the respective security standards. Both the magnetic stripe and the chip are interoperable . Both duality and flexibility in use are decisive for this property. These technical, rather bulky words simply explain that the credit cards can be read at the respective reading devices of the acceptance points.

The interoperability that makes this possible has an elementary disadvantage, especially with magnetic strips. Since the data on it cannot change because it has been mechanically integrated into the magnetic stripe, fraudsters can copy it theoretically and practically equally. In this way, these fraudsters receive a full credit card without having to steal the real credit card. The EMV chip, on the other hand, works with changeable data records, which means that they cannot simply be copied.

The next concrete difference results from these decisive advantages and disadvantages, namely the safety standards, which both variants bring with them.

Is the EMC chip or magnetic stripe more secure?

Is the EMC chip or magnetic stripe more secure?

This question can be answered very easily: the EMV chip offers a significantly higher security standard and therefore promises the cardholder more security. This is not necessarily surprising, after all, the EMV chip was only developed and integrated decades after the magnetic stripe, whereby an improvement in security was of course the decisive argument for this.

In practice, the chip is safer primarily because it works with changing data sets for verification, unlike the case with the magnetic stripe. A permanent copy of the chip is therefore not possible because this would require that the fraudsters also have access to the databases of Visa, MasterCard and Co.

With every single payment with the credit card, a new data record is created by the chip, compared with the respective update in the database and used for verification. In the case of a magnetic stripe, the same data record is used that was created and impregnated when the credit card was issued. For you as a credit card holder, the EMV chip means more security, although in practice you actually have little or no influence on it.

Which security standard is more common?

Which security standard is more common?

Leading credit card providers always work with both variants on the cards, i.e. both the chip and the magnetic stripe. It is not up to you which standard is ultimately used for payment.

The decisive factor here is which reader is used at the checkout. If the credit card is inserted into it, you always pay with the chip as verification, but if the card is “pulled through”, you pay with a magnetic stripe. You do not determine what is used at any time.

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