Chip Background

What is a Chip Card?

The ‘chip’ in chip card refers to a small microchip embedded in the payment card. The secure data stored on the chip is virtually impossible to copy or change. EMV c hip represents the most secure technology available today to protect payment information and to prevent certain types of payment card fraud. The chip infrastructure is designed to evolve with future security enhancements.

What is the EMV Specification?

EMVCo was formed February 1999 by Europay International, MasterCard International and Visa International. EMVCo's primary role is to manage, maintain and enhance the EMV Specifications to ensure interoperability and acceptance of chip payment cards globally.

The World is Migrating to EMV Chip

Today, EMV chip can be found in over 65 countries and the number of EMV cards and terminals deployed continues to grow. As of June 2007, there were over 622 million EMV chip cards and 8.2 million EMV capable terminals deployed worldwide.

The gradual roll-out of EMV chip cards and chip-enabled devices (i.e. POS, ATMs, Integrated Solutions), continues around the world and Canada has begun a national migration to chip technology.

Why Chip? Why Now?

Credit card fraud continues to escalate and its startling growth has been the impetus for the payment networks to combat fraud with the highest level of security - Chip & PIN technology.

Preventing fraud growth is the main driver behind chip migration in Canada. Fraud is largely the work of large, organized criminal organizations and is an international problem. The implementation of Chip & PIN makes it more difficult for fraudsters to target payment cards. Part of the growth in fraud in Canada is due to the migration of fraud away from regions that are implementing, or have implemented chip technology to regions that still use magnetic stripe technology.

Counterfeit fraud in Canada on debit and credit cards totaled over $280 million in 2007 and has been growing at over 15% annually. The number of consumers and merchants impacted by fraud continues to grow. Chip technology represents a proactive way to protect the Canadian payment system from fraud and ensure consumer and merchant confidence in card payments.