Chip and Pin enabled credit cards provide additional security. They are highly advanced cards and are less vulnerable to skimming and thus provide fraud protection.
The essential features of a CHIP and PIN enabled Credit Card
Normally, the cards have magnetic stripes at the rear end of the card which stores and transact data. A CHIP is a small micro chip embedded in a card which ensures better security and stores data in an encrypted format.
The card holder only knows the PIN which is encrypted on the CHIP. When you use a CHIP and PIN card at a POS terminal, the machine will ask you to enter the PIN. You are required to enter the PIN to have your transaction completed.
The necessity for a CHIP and PIN enabled card
The CHIP makes your card more secure. The old types of cards have a magnetic stripe which is less secure. In these CHIP and PIN enabled cards the data is stored in an encrypted format and protects your card from online fraudulent transactions. When you make purchases using this card at a POS you will have to sign on the charge slip to complete the transaction. This provides additional security. The usage of ATM PIN enables you to validate and authorize all your Point Of Sale transactions. Thus, you will get utmost security for all your transactions.
CHIP and PIN enabled cards have a magnetic stripe at the back
Most of the merchants have payment terminals that have PIN authentication support which enables payments through the new CHIP and PIN card. But there are merchants who do not possess such terminals. You can make payments at these retail outlets using the magnetic stripe on your card. Anyway, your ATM transactions are enabled by the magnetic stripe on your card.
The necessity to enter Credit Card ATM PIN in all purchase transactions
When you make a purchase, whether it is domestic or international at a point of sale it is mandatory to enter the ATM PIN on account. This makes your transaction secure and authenticated. If you fail to enter the ATM PIN at a POS, the transaction will be rejected by the bank. If you forget the PIN you will be allowed three attempts and again if you fail you will have to get a new PIN from your bank.
There can be chances of misuse of ATM PIN
Be careful to enter the PIN yourselves on the POS terminal. You should not disclose the PIN to anybody while making a purchase. It is always good to take some extra care while entering your ATM PIN. There can be chances that the customers or salesmen overlook while you enter the PIN. Also see whether any CCTV cameras are directed to the pad while the PIN is entered.
The CHIP and PIN enabled credit card has to be dipped in the machine instead of swiping. There is an RBI directive that the customers should accept CHIP and PIN enabled cards.