UPDATE: see below for a follow-up.
Ok so the other day i was paying for groceries at a popular local supermarket and when i gave my bank card to the cashier she swiped it and the payment went through immediately without me being asked to enter my 4 digit PIN code. I asked how that as possible and she said the card must be inserted into the machine then it will ask for my pin. She went on to explain that if it is swiped the transaction can go through automatically, but she doesn’t know exactly why. She said it may be the new chipped cards, but for as long as i can remember I have always had to enter a pin when my card was SWIPED. Why has it suddenly changed. I thought it was just me, but i’ve heard from several people who have had a similar experience where their cards were swiped (not inserted) at a point of sale card machine only to have the transaction go though without the pin code being required. And this is from people with FNB, Nedbank and Standard Bank cards.
If you have a SA debit, cheque or credit card then you will most likely have been informed by your bank that they have switched over to the new generation chip-and-PIN cards that have an embedded microchip in them. It was added as an extra measure of security, but what is the point if your card can be swiped and no code is required.
Is it not possible then that someone can use my card without having to know my pin code?
Now i’ve gone to check online for info on this and found this so far from an article in December last year, but it doesn’t really clarify how it’s possible that my card can be swiped and no pin required.
“When you transact with a credit, cheque or debit card that has an embedded memory chip (known as a chip-and-PIN card), sometimes a point-of-sale machine can’t read the chip and your card is swiped. In these instances, on a chip-compliant terminal, you should still be required to enter your PIN. If the card is swiped and you are not asked to enter your PIN, or the merchant does not obtain authorisation from your bank, you, the consumer, are protected.
Walter Volker, the chief executive of the Payments Association of South Africa, says that, under normal circumstances, if a chip-and-PIN card is swiped on a chip-compliant terminal, the terminal will force you to input your PIN.” [iol]
Now i need to point out again that it’s something that has never happened in the past. For years i’ve been asked for a pin when my debit card was SWIPED. Why only now does it override the pin prompt?
Several people i’ve asked noticed that it happens to them at MacDonalds, at toll gates and Woolies often where their cards are swiped and no pin is required.
I’m waiting for official responses from banks, but in the mean time if this has happened to you or if you have an explanation then leave a comment.
UPDATE: I went into the bank (it’s on one of the major ones) and old them again that my card was swiped and the card machine did not ask for my pin. That and two major retailers did not ask me to sign the receipt either. Staff at the bank told me they would replace the debit card, but it’s likely to happen again since it’s not the cards fault, but that of the card machine.
So i asked what i should do about it and they said i should take it up with the retailer and tell them to get new machines? WTF? I must go tell the Woolies and Pick n Pay outlets to get new machines? How is that my problem?
And the bank staff went on to mention that if your card is swiped and the transaction goes through without asking for a pin then you should make sure you are asked to sign the copy of the receipt. In the event that your card is stolen or used without your permission and someone successfully buys something where the card was swiped and no pin was required they wont refund your money if there was no signature.
Still waiting for an official explanation in writing from the bank.