A handshake, every time
Turn the key and the car sends a radio challenge to the transponder in the key head. The chip answers with its code. Only if the answer matches does the immobilizer release the engine.
It is passive — there is no battery in the chip itself. It draws the tiny amount of power it needs from the car's own signal.
How to tell if you have one
A thick plastic head on an otherwise ordinary-looking key is the usual sign. Cars from roughly the late 1990s onward almost always have one.
The definitive test is unpleasant: a key without the right chip turns the ignition and the engine cranks but will not run, or does not crank at all.
What replacement involves
The right chip family, the right blade, cut accurately, then paired to your car. The kiosk handles the capture and the shop handles the supply and cutting.
Pairing may be a separate visit. That is worth knowing before you buy rather than after.