How is the PIN for a Credit/Debit Card Secured: Not on the Chip, but on the Bank’s Server

Many people wonder how their PIN (Personal Identification Number) is secured for their credit or debit card. Contrary to common belief, the PIN is not stored in the chip of the card or even in the bank's server in its original form. Instead, a complex and secure process ensures the PIN's safety at all times.

Understanding PIN Security

The PIN for a credit or debit card is stored in a highly secure manner, typically on the bank's servers. The process involves encryption and a series of steps to ensure that the PIN remains secure both in transit and in storage.

Chip Security

The chip on the credit or debit card is called an EMV chip (Europay, Mastercard, Visa Chip) and its primary function is to add an additional layer of security during transactions. This chip does not store the PIN directly; instead, it generates a unique cryptographic key each time the card is used.

Encryption Process

When you enter your PIN at a point of sale or ATM, it is encrypted using a secure algorithm. The encrypted PIN is then sent to the bank's server for verification. The bank's system compares the encrypted PIN with the securely stored, encrypted version of the PIN to confirm its correctness.

Secure Storage

The actual PIN is stored in a highly secure manner on the bank's servers. This storage method often uses strong encryption and security protocols to protect the PIN from unauthorized access. The process ensures that the PIN remains secure and is not easily compromised, whether in transit or in storage.

Additional Layers of Security

In addition to the encryption process, the bank introduces further security measures. For instance, a unique identifier is created from the PIN and sent to the bank. This identifier is generated securely and is checked against the stored identifier to verify the PIN's correctness.

Understanding Unique Identifiers

The unique identifier can range from plain text to various levels of one-way or reversible encryption. In some cases, a look-up table is used in the card reader software. For a 4-digit PIN, there are 10,000 unique values that can be stored in less than 20KiB of storage, where KiB stands for 1024 bytes.

The Chip in Your Card

Interestingly, the chip on your credit or debit card is the same chip found in your phone. The technology is identical, so much so that if you take a full SIM card and a debit or credit card, they can be registered interchangeably. However, there are physical limitations such as the location of the chip on the card.

How SIM Chips Work

A SIM (Subscriber Identity Module) chip has three sets of data: Set one: The SIM number Set two: A validator to prevent duplicate SIM cards Set three: Storage for writable data, used for contact storage in phones or for security purposes in card readers

This writable data can be re-written by the bank as a precaution in case of a potential compromise. The number is 32-bit based and can range from 10 to 100 digits long, depending on the bank's software.

Additional Security Measures

Banks also have additional security measures in place. For instance, if your card is suspected of being compromised, the bank can change your unique card authentication code by making three interactions and two transactions with the same machine. This causes a red flag on your account, making any RF (Radio Frequency) scan useless since the data is too outdated.

Final Thoughts

Everything you set for your PIN is not stored on your debit or credit card. All storage and security measures are handled on the bank's servers. As you can see, the process is complex and designed to protect your financial information effectively.

Remember, if you suspect your card has been compromised, take immediate action by reporting it to your bank and taking the steps mentioned above to secure your account.