Transponder chip disarms a vehicle immobiliser when the car key is used to start the engine. The majority of keys to cars built after 1995 contain transponder chips.
When the car key is turned in the ignition, the engine control unit (ECU) on the car sends an electronic message to the key, and it will allow the car to start only provided it receives the correct message back. So even for a simple car key without any buttons, the key must be cut correctly to turn the locks and also programmed correctly to disarm the immobiliser. Car keys with chips can be programmed by special programmers.