SECURITY
What is Chip?
What is Chip? How chip technology works Chip conversion deadlines
What is Chip?
The transition is to chip is almost complete — it’s the new generation of payment card technology that makes a safe payment system even more secure.
Chip enabled debit cards contain an embedded microchip that put the power of a computer onto your card. Chip card technology is based on a global standard known as EMV, a proven technology in wide use around the world.
Chip technology is both secure and smart, giving your card the ability to store and process data securely. Unlike a magnetic stripe, this processing power makes it extremely difficult to copy and reproduce. This processing power is used, together with cryptography to allow the card and terminal to communicate with one another to carry out security checks to ensure the card is valid. Chip technology also enables advancements like Interac Flash, which is currently being rolled out. Interac chip debit cards and terminals are currently rolling out across Canada. By the end of 2012 all Automated Banking Machines (ABMs) and Interac debit cards will be converted to chip technology and by the end of 2015, all Point-of-Sale (POS) terminals. In many cases, conversion is ahead of schedule. As of the end of 2011, 90 per cent of Interac debit cards and 84 per cent of terminals (ABMs/POS terminals combined) had been converted.
Ever wonder what goes on when you put your Interac chip debit card in a Point-of-Sale (POS) terminal or an ABM, and what it means to you? Take a look at how it all works at a POS terminal below.
Although each Acquirer (also known as the payment service provider) may have their own milestones in place for chip conversion, it is important to note that Acquirers must comply with the milestones and overall conversion dates set by Interac Association. In order to ensure a smooth transition, Interac Association established these milestones and overall conversion dates in consultation with its Members to ensure they work within normal business and device life cycles.
Failure to comply with the established milestones (i.e., a certain percentage of devices/cards to be converted by certain dates) and overall conversion dates may result in sanctions. The overall conversion dates set by Interac Association are as follows:
1. Magnetic stripe debit card transactions will no longer be accepted at ABMs after December 31, 2012. Chip cards will continue to carry the magnetic stripe, not only to facilitate the chip transition period, but also to allow cardholders to use their debit cards in other countries that do not use chip technology.
2. Magnetic stripe transactions will no longer be accepted at POS after December 31, 2015.
