Smart Cards

With all of the new advancements in technology the credit card industry is making changes towards stopping credit card fraud. How are they doing this? One such innovative way is with the new "smart" credit card. This smart card uses aspects that deal with cryptography. The average American citizen might not be too familiar with cryptology but it is the use of secret codes. They not only use authentication but a smart card has a microprocessor built into the actual credit card itself. How is cryptology making advancements in credit card protection? It is essential to the functioning of these cards in several ways: With the use of cryptology the credit card user must prove their identity to the card each time a transaction is made almost in the same means an ATM pin number is used. With the smartcard the card holder and the card itself must engage is executing a sequence of encrypted sign/countersign-like exchanges These cryptic messages are used to make sure that each side of the transaction is dealing with a legitimate counterpart. Then the transaction itself takes place. Not even the card holder is privy to the information that is transcribed. This prevents anyone from obtaining the cardholders personal information. This allows for no later impersonating from any party involved in the transaction. Not even from the establishment where the transaction takes place. The only information that the card holder must surrender in order to begin the transaction is entering their PIN.

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