The modern electronic payment system is developing very rapidly. Only recently have bank cards with a magnetic stripe appeared, when completely new cards with a chip are already replacing them. Despite the fact that outwardly chip cards practically do not differ from ordinary ones, they are considered more reliable.
Chip card
Chip cards are also called smart cards (translated as "intelligent"). The smart card has a built-in chip that stores all information about the cardholder and the state of the account without sending a request to the bank. Chip cards can be debit and credit, contact and contactless types. To read information from a contact card, it must be attached to the reader. Contactless cards work on the principle of radio signal transmission.
Magnetic stripe card
Currently, magnetic stripe cards are the most popular in the world. With their help, you can transfer money to other accounts, pay for utilities, cash out money, pay for purchases, and so on. There are three data tracks on the magnetic stripe. The first contains the last name, first name, patronymic of the card holder, the second - the card number and its validity period, the third is intended for other information.
Why is a chip card better?
In the first place, a chip card is more secure than a magnetic stripe card, since it is much more difficult to counterfeit a card with a more sophisticated security system. In addition, it will not be easy to damage the chip by negligence.
Smart card payments are significantly faster than magnetic stripe cards.
Another positive aspect of chip cards is the ability to work off-line, that is, if you pay in a store with such a card, unlike cards with a magnetic stripe, you do not need to have a connection with the bank at the outlet. In addition, magnetic stripes can be easily scratched and, as a result, damaged or demagnetized information entered on them.
Since a chip card is a kind of microcomputer, it can perform many of the functions found in conventional computers. For example, a card can store information to identify the owner; an area for storing secret information encrypted using a cryptographic method can be allocated on the card.
The built-in chip provides the card with a unique identity, which is almost impossible to forge, since the technologies for the production of chips do not stand still, but are improving and complicated every day. When performing any financial transaction, voltage is applied from the terminal, the chip is activated and, thus, the authenticity of the smart card is determined.
The chip guarantees banks that they comply with all the rules they have established for conducting financial transactions, for example, the need to enter a PIN code when conducting an operation.
Thus, the introduction of cards with a chip maximized the protection of cards against the facts of their counterfeiting and fraud.
