Online PIN verification is a method for confirming a cardholder's identity during a transaction at a point of sale (POS). It's a Cardholder Verification Method (CVM) that authenticates the card member. Think of it as typing your PIN at an ATM, but done during a purchase at a store. This process primarily occurs with EMV chip card transactions or Expresspay contactless transactions.
How Online PIN Verification Works
Online PIN verification happens in real-time. Here's a breakdown:
- Card Insertion/Tap: You insert your EMV chip card into the POS terminal or tap for a contactless payment.
- PIN Entry: The terminal prompts you to enter your Personal Identification Number (PIN).
- Encrypted Transmission: The entered PIN is encrypted by the POS terminal.
- Verification Request: The encrypted PIN is sent online to the card issuer or payment network for verification. This is the key aspect of online PIN verification.
- Issuer Verification: The card issuer decrypts the PIN and verifies it against the PIN stored in their records for that card.
- Approval/Denial: The issuer sends an approval or denial message back to the POS terminal.
- Transaction Completion: If approved, the transaction proceeds. If denied, the transaction is declined.
Key Advantages of Online PIN Verification
- Enhanced Security: The PIN adds an extra layer of security, making it more difficult for fraudulent transactions to occur.
- Cardholder Authentication: Confirms the cardholder's identity during the transaction.
- Acceptable CVM: Online PIN is an acceptable Cardholder Verification Method for EMV chip transactions or Expresspay contactless transactions.
Online vs. Offline PIN Verification
It's important to differentiate online PIN verification from offline PIN verification. In offline PIN verification, the PIN is verified locally on the card itself using the chip. With online PIN verification, the PIN is verified online by the card issuer.
| Feature | Online PIN Verification | Offline PIN Verification |
|---|---|---|
| Verification Location | At the issuer or payment network | On the card's chip |
| Connectivity Required | Yes, internet connection needed. | No, operates independently. |
| Security | Often considered more secure. | Security depends on the card's chip. |
