How to keep your personal identification number (PIN) safe?

With an estimated 1.7 million Australians experiencing card fraud from 2021 to 2022, safeguarding personal finances is critical.¹ Personal identification numbers (PINs) may help, which help verify identities during transactions.

Explore the role of PIN numbers in financial safety here.

What is a personal identification number (PIN)?

A personal identification number (PIN) is a unique authentication code used in various transactions, including withdrawing money from an ATM or making an online purchase.

But what’s the difference between PIN vs. password? Though both can function as security measures for financial transactions and other services, they may vary in:

• Complexity. Passwords often require a combination of letters, numbers, and special characters, making them generally more complex than PINs.
• Length. While PINs are usually limited to four to six digits, passwords can be much longer.
• Usage. PINs are often used as a part of multi-factor verification processes.

What are the different types of personal identification numbers?

Though PINs are primarily associated with different types of payment cards, some other common personal identification number types include:

• Mobile device PINs. Smartphones and tablets often feature PIN-based security, adding a layer of protection if the device is lost or stolen.
• Online services. Some online services, such as tax filing platforms, require a PIN in addition to a username and password.
• Voicemail PINs. These PINs protect personal messages from being listened to by unauthorised individuals.

What is a credit card PIN?

A credit card PIN is associated specifically with a credit card. While not all credit card transactions require a PIN, they add a layer of protection.

Here's how credit card PINs compare to other measures:

• Signature verification. A credit card PIN is generally more secure, as signatures can easily be forged.
• Chip. While more secure, this method still lacks the safeguard of a PIN.
• Contactless payments. While convenient, the security level is generally lower than chip and PIN methods.

How do chip and PIN cards work?

Chip and PIN cards can be a safer way to use a debit or credit card, especially compared to older magnetic stripe cards that only require a signature.

But how do chip and PIN cards work?

1. When someone gets a new card, the chip acts like a mini-computer that stores information securely.
2. With a card in hand, the individual will set a PIN.
3. The individual will insert their card into the point-of-sale terminal and enter their PIN.
4. If the PIN matches the one stored in the chip on the card, the machine will approve the purchase.

Chip and PIN technology typically employ advanced features to bolster security, including:

• Encryption. All data stored on the chip is encrypted, making it difficult for fraudsters to access the information.
• Dynamic authentication. Chip and PIN cards generate a unique authentication code for each transaction.
• Offline verification. Chip and PIN cards may store secure data on the chip itself, meaning they can authenticate a transaction without needing to connect to the bank.

Potential tips and techniques for creating a secure PIN number

Ready to safeguard financial assets and personal information? Use these tips to create a PIN number that's both secure and easy to remember:

• Keep it random. Avoid using easily guessable information like birthdays, anniversaries, or sequences like "1234".
• Length matters. While most PINs are four digits, some financial institutions allow for longer PINs, which may provide extra security.
• Update the PIN regularly. While it may seem cumbersome, regularly updating PINs can keep potential fraudsters at bay.

Learn about PayPal online security and how to make secure transactions with PayPal.