The chip card reader is located in a slot on the front of the PINpad. When a chip card is inserted, the chip card reader reads the information on the card's chip, e.g. whether to prompt for PIN or print a signature line on the receipt.
To correctly insert the chip card in to the chip card reader:
Ensure that:
the card is facing up
AND
the chip 
is closest to the chip card reader slot on the PINpad.
Then slide the card into the chip card reader slot until the card stops sliding in.
IMPORTANT: Leave the chip card in the reader for the entire transaction.
When the REMOVE CARD prompt appears, pull the card gently out of the chip card reader.