FAQ: What security features do chip cards offer?

Because chip cards, or Integrated Circuit Cards (ICCs) use microprocessors to store, analyse and transfer information, they possess several protective characteristics.

This is what makes chip cards so popular in the payment industry. However, companies can also make ICCs with ID printers, allowing organisations to enforce higher facility defence standards. Several chip card security functions are listed below:

1. Cryptograms 

In the traditional sense, a cryptogram is a set of characters that represent specific numbers or letters. These codes have been used as far back as the times of Julius Caesar, when politicians and military leaders would pass secret messages to one another.

Chip cards use cryptograms to encrypt data. Authorization Request Cryptogram (ARQC), Authorisation Response Cryptogram (ARPC), Transaction Certificate (TC) and Application Authorisation Cryptogram (AAC) are four of the processes used to create these ciphers.

2. Application cryptograms 

Application cryptograms are created whenever a chip card interacts with an acceptance device. The purpose of application cryptograms is to authenticate both the chip card and the system it’s communicating with.

Depending on whether the transaction is occurring online or offline, the verification process may be different. For example, when an online authorisation request is required, the chip card and acceptance device will generate is ARQC. When the chip card approves the system it’s communicating with, it creates a unique TC.

3. Chip security evaluation 

Think of chip card transactions as two-way streets. The ICC must validate the acceptance device, and vice versa. So, whenever an ICC initiates a transaction with an acceptance device, the latter must determine whether or not the chip card is abiding by a list of security settings.

4. Dynamic card security code 

A dynamic card security code is a unique cryptogram associated with a specific transaction. That means every time a person uses a chip card to pay for goods or exchange data with an ID card solution, the ICC produces a cryptogram that can only be used once. So, if someone were to steal and decrypt the code, the data itself would be useless.

These are just four out of several dozens security capabilities chip cards possess, but they exemplify the technology’s protective nature.