Chip Cards

Chip refers to a microchip. It is a small computer processor with memory, logic and a configuration of software applications.

A chip card has a microchip embedded in your plastic MasterCard card. Your chip-enabled card has the capacity to store information in a very secure way, with greater capability, applications and enhanced security features compared to the existing magnetic stripe cards.

Your chip card works in a similar way to your existing magnetic stripe debit or credit MasterCard card, you swipe your card and sign to authorise your transaction.

Merchants are gradually upgrading their payment terminals, which will mean slight changes to the way you use your debit or credit MasterCard card.

Generally, instead of swiping, you will ‘dip’ your card into the terminal, where it will remain throughout the payment process. You will still be required to sign to authorise your transaction.

Your merchant will advise you on how to use your chip card with their payment terminal when the changes take place. For now, keep using your chip card as you do your existing magnetic stripe card.

Chip cards are more secure, have more applications and are more convenient than the existing magnetic stripe cards. Chip cards are fast becoming the standard payment technology across the world.

More capacity
Chip cards have much greater capacity to store information and programs than current magnetic stripe technology.

More applications
Chip cards can carry more sophisticated payment applications, including enhanced security programs that provide better protection against unauthorised use of your card. Although current fraud prevention programs are robust, chip will provide more sophisticated protection from potential fraud in the future.

More convenient
Chip cards can be used for innovative new applications like MasterCard® PayPass™, a convenient payment program that will allow you to just Tap & Go™ your card at certain fast check-out locations like petrol stations and convenience stores.

More secure
Chip technology can protect you against skimming, which involves the copying of private information from the magnetic stripe on your card. Unlike the magnetic stripe, a chip can not be copied, which will protect you in the day-to-day use of your card.

For merchants, the chip cards offer increased security and reduced fraud. It means merchants will experience greater convenience and it will minimise the time taken to process a sale. Chip cards may even allow them to offer their own card-based customer loyalty programs. Back to Top

The switch to chip cards is part of a global evolution in the payments industry. Chip cards have already been widely implemented in Europe and Asia, and are currently being introduced in Latin America, Africa and the Middle East.

In Australia, chip cards will provide added protection against credit card fraud, providing added security and peace of mind when making everyday transactions.

The chip card’s greater capacity to store information securely will allow your card provider to provide enhanced payment applications such as MasterCard® PayPass™, a contactless payment option.

MasterCard issuers will be rolling out chip cards to consumers over the next couple of years. For more information on when your bank will be rolling out chip cards, please contact your bank directly. Back to Top

Yes. MasterCard magnetic stripe cards, which are currently the standard credit and debit cards issued in Australia, will work in all terminals, whether they are chip-enabled or not, as the technology in chip ATMs and merchant terminals are fully compatible. Back to Top

Click here for Chip Acceptance Toolkit for Merchants