Might Financial Cryptography Kill Financial Innovation? - The Curious Case of EMV
The credit card system has been one of the world's great successes because of its adaptability. By the mid-1990s, a credit card had become a mechanism for authenticating a transaction by presenting a username (the card number) and a password (the expiry date, plus often a CVV) that was already used in mail order and could be adapted with little fuss to the Internet. Now banks in Europe, and increasingly elsewhere, have moved to the EMV "Chip and PIN" system which uses not just smart cards but also "Trusted" hardware. The cryptography supported by this equipment has made some kinds of fraud much rarer - although other kinds have increased, and the jury is still out on the net effect.