On line banking

[Hopkirk]

I have to use a card reader to pay some things on line, with my Natwest Banking.

How does that work then?

[Buenchico]

Lets imagine that you're in a restaurant and the waiter brings the bill to your table. You present your card and he takes it across to the till before returning with the handheld device that lets you put your PIN in. While he was at the till he could have quickly passed your card in front of a hidden video camera, flipping it over so that it recorded the information on both sides.

He then sells all of the information he collects in that way on to others. (The going rate, I understand, is a couple of quid per card). Several months later, someone uses your card details to make expensive online purchases, with you having no knowledge of how they got your details.

The person making those purchases could make those purchases because they'd got the INFORMATION on your card, even though they'd not got the actual CARD.

The NatWest card readers seek to circumvent such fraudulent activity by ensuring that a bank customer making a purchase actually has the card in their possession. Inserting your card into your card reader produces a unique code for that transaction, which is only valid for a few minutes (and only while the card is still in the reader).

Chris

[Halifaxmum]

The Co-op bank have been doing this for a couple of years.

Thanks for the explanation Chris :)

[Hopkirk]

I still don't understand.

If I am at home and use the card reader to generate a code, how does the bank know that the code is genuine?

The card reader is just a battery operated device that is not connected to the net or the bank in any way?

[Hopkirk]

Oops. Ignore the last question mark, that was a statement.

[factor-fiction]

I think it is programmed with a chip that generates certain numbers in specific circumstances based on a rule- maybe to do with prime numbers or something like that.
But because of this I wonder whether someone will crack the code and criminals will be able to look up a number on the internet

[ChuckFickens]

In generates the code based on the time and date (and sometimes your account or pin) and an algorithm (so yes probably prime numbers) so each code generated is only valid for about 20min from generation.

[Hopkirk]

Thanks. It is a little clearer now.