First Canadian Interac Chip Card Transaction

"The successful processing of the first INTERAC chip debit card transaction represents great progress and brings Canada one step closer to the chip migration," said Mark O'Connell, President and CEO, Interac Association. "We look forward to working with our members and partners throughout the Kitchener-Waterloo market trial towards a smooth transition to chip technology across Canada."

Chip technology will provide increased protection against debit and credit card fraud. The transition to chip technology represents an evolution of electronic payments systems designed to make an already safe system even more secure. The foundation of chip technology is based on the global technical standard known as "EMV"(TM), which is already in use in many countries around the world.

"Processing the first INTERAC chip debit transaction is a milestone that we're proud of as it takes us one step closer to introducing our banking and merchant customers to chip technology," said Jeff van Duynhoven, Vice President, TD Bank Financial Group. "We have made great progress internally to ready TD for the migration to chip technology, both at TD Green Machines and at the point-of-sale, and with the support of Interac Association we are well-positioned to begin our chip roll-out later this year."

Beginning in fall 2007, merchants and cardholders will start to see the introduction of cards, Automated Banking Machines and merchant terminals that feature chip technology, and within three years, it is expected that the majority of Canadians will be able to fully benefit from this new technology.

"Ensuring the security of our customers' information and accounts is an absolute priority for BMO Bank of Montreal," said Michel Chalifoux, Vice President, BMO Card and Retail Payments. "Processing the first retail transaction on a chip-secure BMO debit card represents an important milestone and reassures our customers that BMO is at the forefront of adapting tools and technology that help them make day-to-day purchases conveniently and securely in Canada. BMO customers will enjoy the benefit of this enhanced security from an extensive network of BMO Automated Banking Machines across Canada immediately upon the national roll-out of this chip card technology."

The complete migration to chip technology will take a number of years, given the vast number of Automated Banking Machines, point-of-sale terminals and banking cards across Canada which must be upgraded. Each financial institution has its own timetable in place, so the introduction of chip technology will vary from one participant to another.

Chip cards will continue to carry a magnetic stripe, which remains a safe payment method, 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.