Chip and PIN to combat the problem of credit and debit card fraud

The UK retail and banking industries have joined forces for a ground-breaking programme called chip and PIN to combat the problem of credit and debit card fraud in the UK.

By 2005 most credit and debit card transactions, where a consumer has been issued with a chip and PIN card and is present during the transaction, will be verified by the consumer keying in a Personal Identification Number (PIN) rather than by signing a paper receipt.

Point-of-sale PIN terminals will be of various shapes and sizes like tills are now. Some PIN terminals will have portable or cordless PIN pads, like those often seen in restaurants in France.

Consumers do not need to take any action themselves as their card companies will get in touch when they are ready to issue the new type of card.

Advertising Campaign
The Chip and PIN Programme has recently launched a new advertising campaign called safety in numbers, designed to heighten awareness of chip and PIN.

The safety in numbers theme highlights the importance of numbers in everyday life with the key message that using numbers to verify purchases will make people safer.

The launch of the advertising campaign coincides with one in four cardholders already having a new chip and PIN card and over 167,000 businesses which accept credit or debit cards already switched over to chip and PIN. The chip and PIN rollout began in October 2003 and by late Spring 2004 it is expected that half of all UK cardholders will have a chip and PIN card.

Latest consumer tracking research shows that most respondents (78%) agree that chip and PIN will make cards safer to use and almost two-thirds (60%) say that they are a vast improvement on current cards. Approval grows once people get their new chip and PIN cards. Ninety one per cent of people with new chip and PIN cards say they are safer and three-quarters (75%) of chip and PIN cardholders say they are an improvement.

The rollout of chip and PIN continues throughout the year and the vast majority of people will be using the system by the end of 2005. New chip and PIN cards will be issued and tills switched over according to the individual plans of the banks, building societies, merchants and retailers. Cardholders do not need to do anything now as card companies will contact them when they are ready to issue new cards.

The UK chip and PIN programme is part of an international initiative to tackle plastic card fraud which amounted to £402 million last year. The UK timescales are in line with those for Europe. A similar domestic PIN-based system for debit cards only in France has seen an 80 per cent reduction in fraud since its introduction ten years ago.