A smart card is a credit or debit card embedded with a microchip, which contains encrypted information, making it virtually impossible to duplicate or reproduce information saved to the chip on another card.
The card is inserted into an adapted point of sale terminal instead of swiping it. The client then confirms the transaction by entering his PIN (instead of signing the receipt for credit cards). If a smart card is swiped to read the magnetic strip on a smart-enabled terminal, the terminal will indicate that the card must be inserted. Merchants can provide assistance or insert the card themselves.
Smart credit and debit cards will continue to have magnetic stripes for two reasons:
First, much like the cards themselves, point of sale terminals will be gradually changed over to "smart" technology. According to the Interac timetable, 100% of terminals will be converted by 2015.
Second, some areas, including the United States, have not yet planned a changeover to smart cards. The magnetic stripe will therefore allow our clients to continue using their credit or debit cards in these regions.
Their credit card transactions will be more secure with a PIN than with a signature and consumers are less likely to have information cloned from their smart chip than a traditional chip.
In addition to the improved security, since smart cards are more flexible, they will offer consumers a greater variety of innovative service options in the future.
Even when microchips are added to cards, the magnetic stripe currently found on the back of cards will continue to be included and operational since many countries, including the United States, have not yet switched over to smart card technology.
Our credit cards will continue to be accepted by all authorized MasterCard merchants.
Since spring 2009, the majority of the National Bank MasterCard credit cards issued to our new customers are smart cards. As for our actual credit card owners, they will receive a smart credit card when their current card will expire.
