Abstract: The present invention provides a method for verifying transactions in chip cards which effectively protects a chip card from being copied and facilitates transmission of transactional messages or transactional information over open networks. Consequently, personal information of a particular account and data stored in a chip card thereof cannot be obtained by intercepting the transmitted transactional details, effectively protecting the chip card from being copied, and facilitating the transmission of transactional messages or transactional information over open networks.

Abstract: The present invention enables a cardholder to apply to a card issuing institution to set up a chip debit card. The card issuing institution builds a computing formula into the chip, and when the cardholder uses the chip debit card, the financial transaction system inserts relevant information from the financial transaction proceeding at that instance into the built-in formula of the chip debit card. Corresponding values produced by the computing formula are combined with hidden numerals input by the cardholder when carrying out their consumption transaction, and a dynamic combination code is derived. The dynamic combination code serves as a basis for the card issuing institution to authenticate the identity of the cardholder, thereby effectively preventing the risk of leaking, deciphering, and copying of personal information of the cardholder, and fraudulent use thereof.