A chip card reader is a device that reads information from a chip card, which is a type of payment card embedded with a microchip. These readers are commonly used in retail stores, restaurants, and ATMs to process transactions securely. The chip in the card generates a unique code for each transaction, making it more difficult for fraudsters to clone the card. Chip card readers can connect to various payment systems and are designed to accept different types of cards, including credit and debit cards. They enhance security compared to traditional magnetic stripe readers by requiring users to insert their card into the reader instead of swiping it.