A chip card, also known as a smart card, is a type of payment card that contains a small embedded microchip. This chip securely stores data and allows for encrypted transactions, making it more secure than traditional magnetic stripe cards. When you use a chip card, you insert it into a card reader, which reads the chip and processes your payment. These cards are commonly used for various transactions, including purchases at stores and online shopping. Many people prefer chip cards because they help reduce the risk of fraud and identity theft. As a result, they have become a standard in the payment industry, enhancing security for consumers and businesses alike.