Members of the payment card industry -- Interac Association, MasterCard Canada Inc., Visa Canada Association, and many of their respective card issuers and acquirers -- today announced a firm commitment to a broad industry migration to chip technology. The migration to chip card technology represents a significant change in the Canadian payments landscape, and this large-scale coordination of key players is an important step in ensuring a smooth transition for all participants in the electronic payments system.
While each organization provides their own proprietary security offerings, the payment card industry has come together to ensure a common set of international standards around this new technology. These global standards, known as EMV(TM), allow for the harmonizing of policies, procedures and technical standards, ensuring interoperability among all payment schemes and thereby simplifying the implementation requirements for payment system participants, including merchants. The adoption of these international standards also ensures that participants in the Canadian payments system will utilize established technology, which has been tested and proven in other countries that have already migrated to chip.
The move to chip card technology is the latest innovation in the rapidly-changing debit and credit card environment, and demonstrates the industry's efforts to further secure Canadian electronic payments. Already tested, proven and in wide use around the world, chip cards provide unparalleled security for the payments industry. Chip cards are plastic cards with an embedded computer chip and provide the ultimate in protection against counterfeit and lost and stolen card fraud. In addition to providing increased security, the innovative technology behind the chip card also affords both merchants and cardholders greater convenience at point-of-sale.
This multilateral announcement follows individual announcements by Interac Association, MasterCard and Visa regarding their respective intentions to move to chip card technology, with each organization setting out individual timelines for migration. Beginning in 2007, many merchants and cardholders will start to see the introduction of cards that feature chip technology, and within three years of this date, it is expected that the majority of cardholders and merchants will be able to fully benefit from this new technology.
The migration to chip card technology represents a forward-looking evolution of electronic payments systems designed to make an already safe payments system even more secure. During the transition period to chip, magnetic stripe cards will continue to provide Canadians with a safe, reliable and convenient method of payment. In addition, cardholders can continue to place their confidence in the protection afforded by the additional security features offered by individual organizations.