We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What is a Chip Card?

By J. Airman
Updated May 17, 2024
Our promise to you
WiseGeek is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At WiseGeek, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject-matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

A chip card is a plastic banking prepaid or membership card with embedded circuitry. The integrated microchip in chip cards is an electronic storage device that holds and relays security protocol as well as personal and usage information about the card user. Chip cards offer a higher level of security to the user by employing increased authorization criteria and tamper-resistant encryption. Memory storage capacity in a chip card far exceeds the basic magnetic strip credit card. Many smart card designs are hybrid designs that employ chips, magnetic strips, and wireless data transfer.

Some chip cards are used to hold prepaid balances that are electronically withdrawn. Once the chip card is inserted into a payment machine, the balance is reduced for the amount of the transaction. Cards with no balance can often be refilled by inserting cash into these same machines. This system allows the owner of an arcade or laundromat to store all the incoming cash in one machine to increase security and make collection easier. Unfortunately, there is no way to recover the balance on a lost prepaid chip card.

Regular use and storage of a chip card may cause sufficient damage to affect the function of the circuitry. Some automatic teller machines bend and crease smart cards as they are inserted and ejected. The delicate microchip inside the chip card is only protected by a couple of thin layers of plastic and metal held in place with a very small amount of glue. A crack or split in the plastic of the card may actually release the chip. Institutions that issue chip cards are usually understanding when a broken card needs to be exchanged for a new working one.

Advances in smart cards are combining multiple technologies to improve on the design of the basic chip card. Hybrid chip cards with integrated radio frequency, or RF, technology do not need to be removed from the wallet to pay for a transaction. Information about the payment is relayed between the chip card and the payment machine with invisible radio waves when they are in proximity of one another. These contactless chip cards are often used in mass transit and other public transportation services, where speeding up payment transactions reduces the long, crowded lines. Many analysts believe the next step in chip cards is to integrate with cell phones for an all-in-one secure payment and personal information device.

WiseGeek is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Discussion Comments
WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.

WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.