How are chips built into debit cards?

Chips are built into debit cards by embedding a metal chip on the front of the card. The chip stores cardholder data, but creates a code for every purchase made on the card.

Chip cards were originally designed to replace magnetic strips. However, cards still come with strips to make them compatible with older machines. Chips are generally more secure, as they create unique purchase data for every transaction completed on the card. This means that if a thief somehow gets access to that data, he cannot use it to make purchases on that card. The chips are also encrypted and therefore very difficult to copy, which helps cut down credit card fraud.