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Chip-card flaw found

Published: August 26, 2016
Computer security researchers at payment technology company NCR said they found a flaw in chip-based credit cards issued in the U.S.

The chip cards, which are “dipped” into card readers rather than swiped, are supposed to be more secure and harder to counterfeit. The cards still include a magnetic strip that, if swiped, informs retailers that the card contains a chip and should instead be dipped.

However, fraudulent cards can override a card reader’s ability to tell whether or not the card has a chip. This allows credit card thieves to continue to use stolen cards with magnetic stripes, just as they did before the transition to chip cards.

The NCR researchers advised retailers to “encrypt everything” in a transaction in order to protect their businesses from fraudulent purchases.