> Every chip or contactless transaction is an EMV transaction.
But the parent comment I was replying to says:
> Just because you are using the chip doesn't mean you are doing an EMV transaction.
I presume you're saying he's wrong in this? Or am I misunderstanding what you both mean?
I'm also confused by the PIN thing you mention. Why is there a PIN at all, and why is there an "encrypted PIN exchange"? We're talking about the US, right? The US is chip & signature, and there is no PIN involved. I thought it was supposed to be that the card generates a unique one-time authorization code (public-key signatures?) and the bank validates it? Where does a PIN come into play?
For each transaction a set of very flexible rules is being executed with the aim to perform a number of verifications.
Card Verification
- no verification (just read magstripe or magstripe equivalent from chip or contactless card that does not have any more advanced verification mechanism)
- static verification - for chip, card sends static signature along with the data so that the terminal can verify electronic signature
- dynamic verification - for chip, card accepts challenge and generate response so that the terminal can verify the signature. This also makes it much more difficult to copy the card because it is not enough to copy the available data, you also need to copy the key that is embedded in the card.
Cardholder Verification
- no verification -- sometimes no cardholder verification will be performed (for example contactless under certain limit, unattended terminals without PIN capability or on a plane when there is special rules for airline terminals because people are typically verified separately)
- Signature -- this is where US is stuck it seems
- offline plaintext PIN -- cardholder enters pin, terminal sends the pin to the card, card responds if the pin is correct -- this is the source of most of the skimming problem
- offline encrypted PIN -- same as above but the pin is being encrypted with a key established securely with the card. This is safe but the cards cost more.
- online PIN -- the PIN is never exchanged with the card, it is encrypted and sent to the bank and bank decides whether it likes it or not.
Transaction verification
- floor limit -- sometimes the transaction can be agreed between the terminal and the card. Typically there is some information stored on the card and set of rules that decide that this is possible. The card may be decreasing a limit of funds available offline and when it hits the limit it will force you to perform full chip transaction.
- online verification -- the message goes online to the bank and bank decides.
>- offline plaintext PIN -- cardholder enters pin, terminal sends the pin to the card, card responds if the pin is correct -- this is the source of most of the skimming problem
>- offline encrypted PIN -- same as above but the pin is being encrypted with a key established securely with the card. This is safe but the cards cost more.
what's the difference between the two? can't the attacker put a physical keylogger on the pin pad?
Honestly it doesn't make much of a difference when it comes to classic skimming, because, yes, as you say, you can put a keylogger on the pinpad.
The problem comes from physically stolen cards, if your card doesn't rely on cryptography to secure the request/response channel you can insert a shim between the reader and the card to fake acceptance of an arbitrary pin. This specific attack has already been demonstrated, and if my memory serves correctly it's already being used in the wild.
> Every chip or contactless transaction is an EMV transaction.
But the parent comment I was replying to says:
> Just because you are using the chip doesn't mean you are doing an EMV transaction.
I presume you're saying he's wrong in this? Or am I misunderstanding what you both mean?
I'm also confused by the PIN thing you mention. Why is there a PIN at all, and why is there an "encrypted PIN exchange"? We're talking about the US, right? The US is chip & signature, and there is no PIN involved. I thought it was supposed to be that the card generates a unique one-time authorization code (public-key signatures?) and the bank validates it? Where does a PIN come into play?