BankTech

Beware Banks! Chip-And-PIN Technology Not Safe Anymore

Prosper MarketplaceEmail Marketing Manager

A majority of financial institutions and merchants in the US have started using chip-and-PIN technology with a belief that it has a high level of security for everyone, including their customers. However, a recent investigation by Damage Control S.A. in Mexico questioned the security of chip-and-PIN technology in card readers.

A new type of data skimmer was found in Diebold Opteva 520 with Dip reader. A dip reader is the slot you see in ATM machines where you have to insert the card and remove it quickly. This new type of skimmer came to be known as “shimmer” since the device acts as a shim between the card reader of the ATM and the chip on the ATM card. This shimmer alone doesn’t complete the trap. It requires a GSM module that sends the encrypted data back to the hackers and spy cameras that are installed above the keyboards of the ATM machine.

shimalone

                                                                               A shimmer that is fitted above the card reader from the outside

To enable this hack, crooks have to enter the ATM location physically and enter this device in the ATM with minimal effort. This fraudulent activity by the crooks in Mexico was recorded via Crimedex, which is a service of video intelligence firm 3VR.

As reported in a blog by Security Affairs, other ways to hack the chip-and-PIN technology include:

- Use of SMS or text messages from ATMs using malicious codes

- Using an electronics soldering tool and a phone SIM card instead of card chips in restaurants

With the adoption of every new technology, there are people in the industry who are ready to hack it. Banks, merchants and financial institutions need to keep an eye on fraud happening around the globe to ensure the safety of their customers.

Aboli Gangreddiwar

Prosper MarketplaceEmail Marketing Manager

Aboli is a marketing specialist and a FinTech analyst based in Charlotte, North Carolina. Her FinTech articles bring together her research skills and industry knowledge. Having been an observer of the technology space and the start-up ecosystem in the Silicon Valley for more than a year, she likes to analyze and write about exciting and innovative companies in the payments and commerce industry.

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