[vidarh]

It's less secure than chip and pin credit cards, but it does require the presence of an object that can execute the right encryption operations with the right private keys, which makes it more secure than easily cloned mag-stripe cards. Because it is less secure, there's typically a low transaction limit (in the UK 15-20 pounds).

And it is about convenience - people are willing to accept the risk for the added convenience.

[mcv]

Transaction limits are absolutely an important factor in limiting these kind of risks.

In Netherland, there's also one electronic payment system that does not require a PIN: the "chip knip" (chip wallet). You explicitly transfer an amount of money from your account to the chip (often about $20), and you can use that to pay. You still need to approve the payment by pressing a button on the machine, but if you lose it, you don't lose a lot.

And it probably works without a phone/internet connection, because the money is right there on the card and nothing needs to be verified on any server.