While magnetic stripe cards are capable of storing static data, chip cards use microprocessors to store, encrypt and exchange information between acceptance devices.

Before printing a chip card or magnetic stripe card, you should be aware of how each one validates IDs.

How magnetic stripe cards deliver information 

Many of you are already aware of how to use a magnetic stripe card, but may not be familiar with how transactions actually occur. The following steps detail the authentication process:

  1. Magnetic stripes store characters in binary code, and are structured to describe ones and zeros. The characters could form a set of numbers, a name or other unique identifier.
  2. A device captures the data stored on the magnetic stripe when it’s swiped through a reader.
  3. The card information is delivered via a request to an internal database, which contains a list of approved ID numbers.
  4. If the data provided by the reader matches one of the ID numbers in the database, the cardholder is granted access to a certain room or facility.

As one can see, this is largely a one-way street. Once the card is swiped, it can no longer interact with the reader.

How chip cards exchange information

Chip cards differ in that they can communicate with acceptance devices. This is how these items conduct transactions:

  1. A person inserts the chip card into a terminal capable of interacting with it and enters a four-digit pin.
  2. Both the acceptance device and the chip card verify each other’s identity, confirming they can communicate through a specific application.
  3. The card then creates a cryptogram, or a collection of multiple data sets.
  4. The reader then verifies that the cryptogram was delivered from the card, as opposed to a fraudulent counterpart.
  5. The acceptance device then creates a cryptogram of its own, and delivers it to the card, which confirms that the reader’s cryptogram is authentic.

Technically speaking, the communications associated with chip cards are quite complex. In addition, depending on how an organisation sets up its security system, different assets may approve the cryptograms.

To learn about how your company can use chip cards for identification purposes, speak with an ID printer manufacturer.