ChipandPIN

Chip and PIN, sometimes written as chip-and-PIN or chipandPIN, refers to a card payment system in which transactions are authenticated using an embedded microprocessor chip on the payment card in combination with a Personal Identification Number (PIN). The term is closely associated with EMV technology (Europay, MasterCard, and Visa) and is used to distinguish chip-based cards from traditional magnetic-stripe cards. In many markets, chip and PIN is the dominant method for card-present payments, especially in retail environments.

In operation, a user inserts (or, in some cases, taps) the card at a payment terminal. The chip generates a unique cryptographic response for each transaction, and the PIN is used to authorize the payment. PIN verification can occur offline, with the chip validating the entered PIN locally, or online, where the terminal forwards the PIN and transaction details to the issuer for verification. The system produces a cryptogram that helps prevent cloning and the misuse of stolen card data. The combination of the chip and PIN improves security relative to magnetic-stripe cards that store static data.

Chip and PIN emerged from the EMV standard, developed by Europay, MasterCard, and Visa in the 1990s and rolled out in many countries during the 2000s and 2010s. It gradually displaced magnetic stripes in consumer payments and has since been integrated with contactless methods and other verification requirements for higher-value transactions. While highly effective against several fraud vectors, chip and PIN does not address card-not-present payments and entails costs for card issuance, merchant terminals, and PIN management. Overall, chip and PIN remains a foundational approach to secure in-person card payments.