Editorial Policy

Secure credit cards just got cheaper, simpler

Tina Orem

May 16, 2014

The credit card industry is fixated on chip-embedded EMV cards, which will soon be ubiquitous in the United States, but Paul Berger, a professor of electrical and computer engineering at The Ohio State University, may have found a better, cheaper way to produce secure credit cards.

Magnetic stripes are the typical form of storing credit card data in the United States, and they transmit data easily to retail checkout systems. However, the data is static, meaning it doesn't change, and it's not encrypted. Get the data from the terminal, and you have everything you need to use a credit card fraudulently.

Enter the next wave of technology: EMV (Europay, MasterCard and Visa) cards. They're extremely difficult to counterfeit because their embedded silicon chips hold data that change. Accordingly, if thieves get data on EMV cards from the credit card terminal, which is a common hacking method, they still won't have the PIN required to use the card.

[Related story: Can this card with fingerprint ID protect you?]

The problem, however, is that silicon chips are relatively expensive to make — about $1 each. And they're fragile — just think of all the things a typical wallet goes through in a day.

That's where Berger comes in. His idea: Skip the silicon chip and make the chips out of plastic. That way, you can print the user's information right into the plastic. In other words, the chip becomes the card. Berger's cards would also have micro-antennae that use radio frequencies to power the circuits, which transmit the information.Click to email me

Because they require little more than an inkjet printer and some other simple equipment to create, plastic chips are 90 percent cheaper to manufacture than EMV chips. They're also about half the price of old-fashioned magnetic stripes, which run 19 cents.  That spells big savings for credit card manufacturers.

On top of that, the radio-frequency feature in Berger's cards means users don't have to insert the cards into devices. And even if users do swipe their cards, the circuitry works the same way an EMV's circuitry works: no access without the PIN.

Part of the advancement is the result of the professor's decades-long effort to reduce the amount of energy required to run computer chips. Berger, who founded the Nanoscale Patterning Laboratory at Ohio State, received a National Science Foundation grant that has helped him partner with Finnish researchers to develop ways to mass-produce these chips.

Nonetheless, the banking industry is a difficult ship to turn. Even though the costs of Berger's cards would be much lower, financial institutions would still have to spend a lot of money upgrading their ATMs to accept the cards, and retailers would have to spend billions upgrading their point-of-sale terminals as well.

They may see the light one day, however, which is why Berger is hoping to commercialize his technology through QuTel, a company he founded with Donald Lupo, an electronics professor at Tampere University of Technology in Finland and Wright State University in Dayton.

But even if the banks never get on board, Berger's idea has legs. The simple idea of putting circuitry on plastic rather than silicon could have enormous ramifications for computers, smartphones, and just about anything else that runs on a silicon chip.