Chip cards, also known as EMV cards, are payment cards embedded with a small microchip that enhances security during transactions. Unlike traditional magnetic stripe cards, chip cards generate a unique transaction code for each purchase, making it difficult for fraudsters to replicate. This technology helps protect sensitive information and reduces the risk of unauthorized use. When you use a chip card, you typically insert it into a card reader instead of swiping it. The reader communicates with the chip to verify the transaction, providing an extra layer of security. Many countries have adopted chip cards to improve payment safety and reduce fraud.