INTERAC, Canada’s national debit network and payment brand, announced the start of the national deployment of smart card technology, a generation of payment card technology that will combat debit card fraud and the production of counterfeit cards.
Starting this fall, members of the Interac Association will begin distributing chip debit cards to their customers while members also continue to replace Automated Banking Machines (ABMs) and retail terminals with chip-enabled devices. Each financial institution and payment processor has its own timeline in place for the distribution of cards and terminals across Canada; therefore the introduction of chip technology will vary from one organization to another.
The complete migration to chip technology will take a number of years, given the large number of debit cards, ABMs and store terminals across Canada that need to be be upgraded. Interac has set transition requirements to ensure that the majority of Canadians will be able to fully benefit from this new technology by 2010, the point which the majority of ABMs and debit cards will be converted. The association announced that magnetic stripe transactions will no longer be accepted at ABMs after 2012 and at store terminals after 2015.
Chip debit cardholders will experience only a minor change in the way they interact with the store terminal. When conducting a chip debit transaction, cardholders will no longer swipe the card through the machine. Instead, cardholders will insert their debit card chip first into the terminal and leave it in the device for the duration of the transaction, following the prompts and entering their PINs, just as they do today.
Chip cards will continue to carry the magnetic stripe, not only to facilitate the chip transition period, but also to allow cardholders to use their debit cards in other countries that do not use chip technology.