Chip-and-pin system comes into force

Chip-and-pin system comes into force

	Published : Tue, 14 Feb 2006 17:05 By : Phil Bateman Print this Story

LONDON: Tuesday marks the formal introduction of the chip-and-pin system in Britain, when a mere signature will not be enough for shoppers to buy goods and services across the country.

Under the new system, shoppers will be required to remember their debt or credit card PIN numbers, as from today they cannot shop with the credit cards by just signing for verification.

Retailers, along with banks in the country, have introduced the chip-and-pin technology to curb the increasing credit card frauds. The system works on a four-digit PIN number, which the shoppers are required to punch in while authorising a payment through their cards.

Some 127 million chip-and-pin cards have been issued since the system's rollout in 2003, according to payments association APACs, but until today, a shopper could also opt to sign authorising a purchase.

APACS feels the system is necessary to check the increasing number of card frauds in the country, which accounted for 800 million pounds in 2005, from 504 million pounds in 2004. It said more than 80 per cent of the organisations in the country are now ready to shift to this technology though some retailers are still not ready for the technology. They can continue with the signature system, but will have to take responsibility for loss of goods or fraud.

One such chain, B&Q, owned by Kingfisher, which has some 329 stores across the country, said it is still not ready for the system, but will upgrade by mid-April.

John Lewis food store Waitrose decided to suspend the system in November after problems first with the card-reading units and then with the software. The chain was, however, confident to declare that the system will be launched on schedule on 14 February at all its 174 branches.

John Lewis said of its 27 stores, 19 have the new system in place. Three more will be chip-and-pin enabled by the beginning of March and another four by the end of June.

APACS said some shoppers could continue to sign to verify their purchases after the deadline. They would include those with cards not yet upgraded, overseas card users and disabled people who have a chip-and-signature card.

Meanwhile, a spokesperson for the Disability Rights Commission said it had received calls from concerned people who had chip-and-signature cards and had encountered problems with the cards. Some were asked to produce medical evidence, or told that they needed photographic identity before they could authorise a payment.

The National Consumer Council said the banks had not adequately advertised about these cards. It estimates that up to three million elderly and disabled customers would prefer to continue using their signature. Though the banks have introduced chip and signature cards, they have issued only 100,000 cards so far.

A spokesperson for banking institutions admitted that information about the cards had been "mixed".