The terminal captures the PIN from the user and sends it in clear to the chip card. The chip compares the value received with a witness value stored in its permanent memory since the personalization stage.
Card Issuers that do not consider the threat of eavesdropping on the interface terminal-card prefer this method to on-line enciphered PIN since implementing it is cheaper and it allows the off-line completion of an EMV ยข transaction at an unattended terminal. The terminal implementing this CVM has to be equipped with an off-line PIN pad, which is a tamper resistant device such that capturing the PIN of the cardholder on the interface card-terminal is difficult.