MasterCard Canada announced today that 12 of its card issuers will be working with MasterCard and five leading acquirers to introduce chip-enabled MasterCard payment cards in Canada by 2010.

MasterCard leads in the implementation of chip cards worldwide, with more than 248 million chip cards in active use globally, significantly more than any other payments organization.

The Canadian MasterCard issuers are ATB Financial; BMO Bank of Montreal; Canadian Tire Bank; Capital One Canada; Citibank Canada; Credit Union Electronic Transaction Services (CUETS); GE Money Canada; HSBC Bank Canada; MBNA Canada; National Bank of Canada; People’s Trust Company; and President’s Choice Bank.

The acquirers are First Data Loan Company, Global Payments Inc., Moneris Solutions Corporation, Paymentech Canada and United Network Payment Solutions.

“The shift to chip is one of the most important changes to the Canadian payments industry since its inception,” said Kevin Stanton, President, MasterCard Canada, in a release. “Chip cards will bring unprecedented security, convenience, and value to consumers and businesses. It also means the implementation of industry-wide technical and commercial infrastructures..”

A chip card contains a microchip akin to a small computer processor with memory, logic and a set of software applications. The capability and capacity of the chip is significantly greater and more powerful than magnetic stripe technology found on today’s cards. Chip cards have the capacity to store more information, and therefore the capability to implement sophisticated payment applications and customized programs. For example, businesses can design more flexible reward programs that can be activated instantaneously when a customer chooses to use a certain payments application. Chip cards also hold information in an encrypted form and require the use of a PIN (personal identification number), significantly enhancing security.