The chip and PIN programme, which allows shoppers to verify
purchases at point of sale by keying in a four-digit PIN, was
launched last year to tackle the growing problem of credit and
debit card fraud.
Part of the problem is that it is easy to fake a signature when
signing a receipt. The new PIN system, due to be fully operational
by 1st January next year, will also come with smart chips embedded
in cards, which will store information more securely than magnetic
strips.
The UK programme began with a successful public trial in
Northampton and is now being rolled out nationally.
Chip and PIN released its latest "chip and PIN" barometer at the
end of August, which reported that nearly 50 million chip and PIN
cards have been issued to over 25 million cardholders – well over
half of the UK's 42 million cardholders – and that almost half of
all tills in the UK have now installed chip and PIN with 396,000
tills at shops, restaurants, and bars switched over.
A year on from the trial, new research from Chip and PIN shows
that Northampton cardholders remain overwhelmingly positive about
the new payment method. Two-thirds of the town's chip and PIN
cardholders feel the cards are safer and protect them from fraud
and 84% think it would be much easier to forge a signature than
guess a PIN.
Remembering a PIN is also proving no problem: 97% of respondents
knew the PIN on their debit card and 67% knew the PIN on their
credit cards.
"The full national roll out is well underway right across the UK
and the experience in Northampton points to a successful
implementation elsewhere," said Jemma Smith, spokesperson for Chip
and PIN.
But not everything is proceeding to plan, according to The
Guardian, which yesterday reported that thieves are intercepting a
growing number of the chip and PIN cards – which are being sent by
post to customers.
To make matters worse, says The Guardian, customers are often
not expecting the new cards and therefore only find out about the
theft when they are unable to take money out of their account.
Speaking to the newspaper, a spokeswoman for the Association for
Payment Clearing Services (APACS) said, "There is a feeling that
there is a concerted effort among criminals to get more money out
of the system ahead of chip and PIN's introduction."
"For the banks it is a risk assessment exercise, but you have to
remember that the majority of cards arrive without problem - when
they do go missing in the post the customer is not liable for any
subsequent losses," she added.
The programme is part of an international initiative to tackle
counterfeit and lost and stolen plastic card fraud. A similar
domestic PIN-based system in France saw an 80% reduction in fraud
when it was introduced twelve years ago, according to Chip and
PIN.
