The cash card code has already been cracked

From Correspondent Rusty Dornin

SAN FRANCISCO (CNN) -- Smart cards are billed as a consumer convenience, keeping people from having to fumble about for cash or small change. Instead, cash is stored electronically on a card and then deducted with one swipe when purchases are made.

But just how secure are these cashless cash cards?

Joshua Jaffe and a group of cryptographers are looking for the answer to that question. Visa and other companies who produce cash cards hired them to deliberately try to crack the secret codes that make smart cards smart.

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Jaffe recently succeeded.

If information on how to duplicate his feat fell into the wrong hands, counterfeiters could redeem fraudulent amounts of money by loading the cards with fake cash in digital form. But the cryptographers believe they now have six months of lead time over the thieves, enabling card companies to install additional systems to thwart fraud.

Visa, which rolled out its smart cards in 1996, now has 8 million of them in circulation. The company says it has yet to encounter a single case of fraud.

However, if you lose a smart card that has money stored on it, it won't matter how secure the chip is. The money is just as gone as it would be if it were cash or coins.