This means all issuers will be working to agreed technological standards which ensure chip cards are accepted around the world. The advantages of chip cards The variable memory capacity and processing ability of the chip means that chip cards can be multi-functional. One card could operate as a credit card, a debit card and an electronic purse. Chips improve the management of loyalty programmes and provide security for distance banking and remote payments, for example over the Internet. Future chip cards could be used to store information such as passport and ID details, driving licences and health records.
Chip cards can help to reduce fraud.
Chip cards are more difficult and costly to counterfeit than conventional magnetic stripe cards. A chip can check whether cards belong to the people presenting them. The signature on the card is the current means of verifying cardholders when purchases are made. The PIN is used to verify the cardholder at ATMs. Further in the future, a chip card will allow other fraud prevention techniques such as fingerprint, hand geometry, retina scanning or computerised signature checking.