A chip card (also referred to as a “smart card”), is a credit or debit card that contains an embedded computer chip. A chip card is the next generation of credit and debit cards. Just like your current debit card, chip cards will require the cardholder to enter a Personal Identification Number (PIN).

The information stored on a chip is the same payment related information that is currently stored on the magnetic stripe. This information is protected by multiple layers of security and will allow a transaction to be authorized and processed. No personal information is stored on the chip.

Chip cards and chip terminals work together to ensure a highly secure transaction by validating the card and the cardholder via a PIN. The computer chip makes cards more difficult to copy, reducing counterfeit fraud. Chip credit and debit cards make a secure payment system even more secure.

The move to chip technology is the latest innovation in the rapidly changing payments environment. The move demonstrates the industry’s efforts to prevent counterfeit and lost and stolen fraud and to further secure Canadian electronic payments.