Chip-and-PIN readers can be tricked into accepting transactions without a valid personal identification number, opening the door to fraud, researchers have found.
Researchers at Cambridge University have found a fundamental flaw in the EMV — Europay, MasterCard, Visa — protocol that underlies chip-and-PIN validation for debit and credit cards.
As a consequence, a device can be created to modify and intercept communications between a card and a point-of-sale terminal, and fool the terminal into accepting that a PIN verification has succeeded.
The researchers conducted an attack that succeeded in tricking a card reader into authenticating a transaction, even though no valid PIN was entered. In a later test, they managed to authenticate transactions, without the correct PIN, with valid cards from six different card issuers. Those issuers were Barclaycard, Co-operative Bank, Halifax, Bank of Scotland, HSBC and John Lewis.
The central problem with the EMV protocol is that it allows the card and the terminal to generate ambiguous data about the verification process, which the bank will accept as valid.
In particular, the terminal can record that a PIN verification has taken place, while the card itself receives a verification message that does not specify that a PIN has been used. The resultant authorisation by the terminal is accepted by the bank, and the transaction goes ahead.