HDFC Bank is aiming to give chip based credit card to more than 5 lakh card holders in the country this year.

These cards would be extended to the existing premium card holders of the bank as well as new customers in the top category of cards. "We are rolling out a phased upgradation of Visa, Platinum and Signature credit cards onto the chip-based technology," Parag Rao, head - credit card marketing at HDFC Bank said.

Out of its target of 5 lakh cards, the bank has already completed upgradation of 2 lakh cards. "We are initially doing it for people who travel abroad frequently, especially to Europe and South-East Asian countries, where chip-based cards are mandatory. There they accept only chip-based cards," Rao said.

Card skimming or cloning problems have been on a rise since some time. Skimming or cloning of cards refers to the process whereby the data of credit cards is copied by fraudsters. "Data compromise happens when the card is out of your sight say in restaurants or maybe at a petrol pump. Under chip-based cards, cases of skimming are now next to negligent (in the countries that have only chip-based cards now)," Rao said.

"A chip-based card will be dipped at a point-of-sale (POS) terminal and not swiped like magnetic stripe-based cards are," said Rao. "All our POS terminals can accept chip-based cards. Overall, 75-80% terminals are enabled to accept such cards. This is not because the industry is planning to offer more EMV cards, but because there are foreign travellers who use chip-based cards," he added.

"The cost of a chip-based card is 2.5 times higher than the regular magnetic stripe cards," Rao said while speaking of the cost of these cards. "We will not charge any fee (for upgradation)," he said.