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When cards only stored information on a magnetic strip, it was quite easy for fraudsters to produce an exact copy of a card and use it for payments in stores and withdrawals at ATMs. At first, the data was read with a special device — a skimmer that was mounted on an ATM or a terminal in a store. This was supplemented by a camera or a special pad on the terminal keyboard to find out the card’s PIN code. Having obtained a card dump and a PIN, fraudsters wrote the data to a blank card and used it at an ATM or in a store. This technology still works in some parts of the world, but the advent of chip cards has greatly reduced its effectiveness. A card with a chip is not so easy to copy. That’s why criminals started infecting payment terminals with malicious code that copies some data from the card while processing a legitimate purchase. Subsequently, the scammers send cleverly generated payment requests using this information. In essence, they only send data that was previously recorded on the magnetic strip, but label the transaction as being conducted by the chip. This is possible where banks don’t cross-reference various transaction parameters in sufficient detail and incorrectly implement the EMV protocols that all chip-card actions must abide by.

With banks that don’t suffer from such laxity, attackers use an even more sophisticated trick. When the victim makes a legitimate payment, the infected payment terminal requests that the inserted card generates another fraudulent transaction. Thus, the card itself isn’t copied, but extra funds are deducted from it anyway.

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In these scams, ATM skimmer devices are inserted in the card reader or otherwise installed within the terminal. However, some skimmer devices may fit over the terminal's card reader or be situated along exposed cables at freestanding ATMs (such as those found at convenience stores).
Pinhole cameras installed on or around ATMs record a customer's PIN entry. Pinhole camera placement varies widely.
In some cases, keylogging keypad overlays are used instead of pinhole cameras to records PINs. These overlays record a customer’s keystrokes.
POS skimming devices, such as those capturing EBT card data, are generally designed as overlays to the POS terminal and have wireless transmission capabilities. These may be present in any market, convenience store, or retailer.It only takes seconds to install a skimming device. Fraudsters may seek to distract store clerks—such as by requesting items from behind the counter—to accomplish this.

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