Card fraud was measured at a record £424.6 million in 2002, according to the Association for Payment Clearing Services. Part of the problem is that it is easy to fake a signature when signing a receipt. The new PIN system, already used in many other countries, will also come with smart chips embedded in cards which will store information more securely than magnetic strips. The UK is one of the first countries to introduce chips on cards.
The UK programme starts with a public trial in Northampton which will begin next month, followed by a national roll-out. In addition to around 1,000 retailers, American Express, Barclaycard, Barclays Bank, the Co-operative Bank, Egg, Girobank Merchant Services, HSBC, Lloyds TSB, MasterCard, The Royal Bank of Scotland Group, Switch and Visa are all participating in the trial.
The UK roll-out will see more than 850,000 retailer terminals, 122 million cards and 40,000 cash machines upgraded by 2005. According to industry group Chip and PIN, a similar PIN-based system in France saw an 80% reduction in fraud since its introduction 10 years ago.
For more information, see:
www.chipandpin.co.uk