Offline PIN is a cardholder verification method, or CVM, unique to EMV cards; magnetic stripe cards do not support offline PIN. As its name suggests, offline PIN can be performed regardless of whether the terminal has an internet connection.
When the EMV card is programmed, the offline PIN code is stored within the card’s microprocessor. During an offline PIN cardholder verification, the PIN entered into the terminal or PIN pad is sent to the card. The card’s microprocessor then returns one of two answers: if the entered PIN and the stored PIN are the same, the card sends a confirmation signal; if they are different, the card sends a failure signal. In this way, the stored PIN is never transmitted; it remains securely stored within the microprocessor.
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Offline PIN is only available for contact EMV transactions; it cannot be used with contactless NFC transactions. Additionally, a terminal may be configured to accept offline PIN, but still require an online transaction verification. This is the typical configuration for most EMV terminals currently in service.
According to the Smart Card Alliance, “online PIN or offline PIN CVMs may help protect against fraud resulting from lost, stolen, and never-received cards.”
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