Chip and pin cards is a term used for smart cards or IC cards, primarily in the UK. The term can also refer to the related global initiative to reduce credit card fraud.
The initiative, begun in the UK, requires companies who issued credit and debit cards to replace older credit cards, which use a magnetic strip to transfer information and a signature for verification, with new IC cards that require a PIN.
Information on the chip is much harder to access than it is on the older magnetic strip card. Two factor authentication is provided by the presence of the card and the fact that the card carrier knows the PIN. The card carrier has three tries to enter the PIN. Three wrong attempts and the card is locked and unusable until the card issuer is contacted.
Card issuing companies developed the International EMV Standard to support this and other initiatives. Adoption of the Standard means that people can use the same cards in point of sale devices around the world.