A personal identification number (PIN) pad is an electronic keypad for customers using payment cards, such as debit cards or bank cards, to input their personal identification numbers when making purchases. PIN pads are now standard components of checkout counters at most major retailers because more shoppers have begun paying with payment cards rather than with cash or checks. The payment card industry has designed these cards with the PIN requirement as a security measure against unauthorized use.
After a payment card has been swiped at a cash register during a commerce transaction, the correct number needs to be entered into the PIN pad in order to give the vendor access to the funds linked to the card. The payment card industry's security policies have led to the development of an integrated circuit chip that is built into modern payment cards. These cards are also known as chip cards or smart cards. The chip encrypts an entered PIN number in order to prevent any third parties from possibly accessing it.
A PIN pad can be programmed to transfer banking access and information in one of two ways. Some point-of-sale systems electronically send an encrypted PIN to a bank's automated information management system for verification. Others transmit the PIN only to a recognition chip within the PIN pad itself. This second method is called offline pin verification, because the PIN is not sent over any network to an external system connected to a bank.
Security features are high priority for the creators of the software for electronic sale transactions that include PIN pad use. If a PIN is typed incorrectly into a PIN pad, customers usually have a limited number of chances to re-enter it correctly before the card is declined altogether. This measure is the first line of defense against card theft. Additionally, PIN pads are manufactured with security coding that automatically clears any records of entered numbers if thieves attempt to download the PIN pads' data or otherwise hack into them.
The most frequently used method of encryption for PIN pads is called the Triple Data Encryption Algorithm (DEA). This encryption runs an entered PIN through a specific cipher three times, rendering the numbers into meaningless strings of characters that are very difficult for even the most persistent cyber-criminals to crack. The Triple DEA meets the standards for PIN pad security that the International Standards Organization (ISO) dictates for the payment card industry.