How Do Chips Make Credit Cards More Secure?

The video explains the transition to credit cards with microchips, highlighting their enhanced security features compared to older magnetic stripe cards. It details how chip cards use encryption to generate unique cryptograms for each transaction, making it difficult for criminals to replicate card information. The video also discusses the verification process and the limitations of chip cards in online shopping, where static information is still used.

Why are chip credit cards considered more secure than older magnetic stripe cards?

• They use encryption to generate unique numbers for each transaction.

• They have a longer expiration date.

• They are more difficult to lose.

• They are made of stronger materials.

What is the primary function of the cryptogram generated by a chip card?

• To display the cardholder's balance.

• To create a unique transaction number that cannot be reused.

• To store the cardholder's personal information.

• To encrypt the cardholder's PIN.

How does the terminal verify the authenticity of a chip card during a transaction?

• By asking for a password.

• By scanning the cardholder's fingerprint.

• By comparing the cryptogram with bank records.

• By checking the cardholder's signature.

In what scenario do chip cards not provide additional security?

• When used at a grocery store.

• During online shopping.

• When making international transactions.

• When used at an ATM.

What is the main advantage of chip cards in preventing fraud?

• They are easier to use.

• They are cheaper to produce.

• They prevent the reuse of transaction data.

• They have a larger storage capacity.