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News on the introduction of chip and pin as a method of authenticating cardholders at the point-of-sale in customer present environments. Latest news is at the top.
On the 26th September 2006 the Duke of Uke in London became part of history as it switched on Britain's one millionth point-of-sale (POS) terminal to accept plastic card transactions. According to APACS the number of POS terminals in the UK has increased by more than 36% since December 2000. The number of outlets accepting cards as a method of payment has increased by over 50% since 1995.
Exactly 6 months following 'PIN day' (February 14th 1006), APACS have issued an update on the successful progress of chip and pin within the UK. Highlights of the report include:
The chip and pin programme have released final advice for the changeover to chip and pin on February 14th 2006. In summary:
Chip and pin programme press release on final advice for February 14th (PDF - 64K)
The chip and pin programme have released new research concerning the acceptance of chip and pin from disabled card holders. The research indicates that the majority of the UK disabled cardholders have welcomed the change and are happy using chip and pin on a daily basis. They cite ease of use against the old method of signing and that using a PIN is a safe way to pay as the major advantages.
The chip and pin programme (the group in charge of chip and pin adoption in the UK) have stated that after Valentines Day (February 14th) 2006 cardholders must use their PIN to be sure of being able to purchase goods on their card. After this date if a customer does not use their PIN the card may be declined and the option of being able to use a signature may not be available. So the message is that you will need to start loving your PIN. Signature authorisation will still be available in outlets that have not as yet converted to chip and pin, cards that are not PIN enabled as yet, when abroad in non-PIN countries and cardholders who have difficulty in using a PIN.
With the rollout of chip and pin starting to take place across Europe the chip and pin programme in th UK is urging card holders to ensure they know their PIN before travelling abroad. In some countries the fallback to signature may not be accepted and if the PIN is entered wrongly three times the card will be locked. Unlocking a card will then require a visit to a UK ATM. Information on remembering your PIN...
The chip and pin barometer report is now available for July detailing the progress made on implementing chip and pin within the UK.
Get a free electronic copy of the Chip and Pin Barometer Reports
100 million credit and debit chip and pin cards have now been issued to 38 million card holders in the UK
Banks are said to be lagging behind the retail industry in the roll-out of chip and pin, despite putting considerable pressure on retailers to adopt the technology.
According to the UK Association for Payment Clearing Services (APACS) more than a third of UK cardholders are yet to be sent chip and pin-enabled cards by their bank. Banks need to issue an additional 40 million chip and pin cards by the end of the year to meet the APACS target of achieving 95% roll-out across the UK.
The card issuers mandated the roll-out of chip and pin systems by 1 January 2005. After this date retailers not using the technology but who processed a chip and pin card became liable for any fraud perpetrated on that card.
Some retailers have struggled to justify the expense of equipping stores with chip and pin systems citing that they did not see the benefit from reducing the fraud level and not being able to quantify the amount of fraud they would become liable for.
With the introduction of chip and pin happening in late 2004 the criminal community appears to have seized on their chance to make big earnings in the last year before chip and pin is due to reverse the rising trend of cardholder present fraud. See 2004 Fraud Figures
Although chip and pin is well underway there still remains approximately 15% of retailers to introduce the technology. In addition 50 million cards in circulation are still not chip and pin (90 Million chip and pin cards are said to be in circulation.)
From the main banks the % of issued cards with chip and pin are as follows:
| Bank | Debit | Credit |
| Lloyds TSB | 60% | 80% |
| Barclays | 70% | 70% |
| HSBC | 90% | 80% |
| RBS | 85% | 85% |
| MBNA | Not disclosed | Not disclosed |
The chip and pin barometer report is now available for December detailing the progress made on implementing chip and pin within the UK.
Get a free electronic copy of the Chip and Pin Barometer Reports
The chip and pin barometer report is now available for November detailing the progress made on implementing chip and pin within the UK.
The chip and pin barometer report is now available for October detailing the progress made on implementing chip and pin within the UK.
The chip and pin barometer report is now available for September detailing the progress made on implementing chip and pin within the UK.
The chip and pin barometer report is now available for August detailing the progress made on implementing chip and pin within the UK.
The chip and pin barometer report is now available for June detailing the progress made on implementing chip and pin within the UK.
The chip and pin barometer report is now available for May detailing the progress made on implementing chip and pin within the UK.
The chip and pin programme advertising campaign "Safety in Numbers" starts. The campaign is designed to heighten awareness of chip and pin which is the biggest change to the way consumers pay for goods since decimalisation. The campaign includes TV, radio and press advertising.
Retailers yet to switch to the chip and pin payment system were warned by Colin Grammell, managing director of Visa in the UK, that they risked a higher level of fraud. He commented that "Fraudsters will soon work out which stores have chip and pin and which don't. They find those weakest links and they will target them without a shadow of a doubt."
Analyst firm The Butler Group has warned that "Medium-sized retailers must begin to implement Chip and Pin compliant electronic point of sale systems or risk falling into a new retail underclass." The statement has been made following the release of the quarterly Chip and Pin "barometer" report.
It is thought that the top 25 retailers in the UK will meet the chip and pin deadline. These are the companies that can afford the new technology, testing and implementation costs. They also have the most to lose by not adopting the technology and falling fowl of the liability shift on fraudulent transactions at the end of 2004.
Smaller retailers renting point of sale terminals are also expected in the main to meet the deadline with the banks upgrading the existing terminals.
Many of the 10,000 second tier retailers in the UK cannot justify the cost of replacing systems. It doesn't help that the cost of not adopting the new technology is at present unquantifiable with regard to the charges resulting from the liability shift.
What is known, however, is that fraudsters will migrate to those companies known not to be using the new technology and therefore seen as an easier target.
The UK rollout of chip and pin for the processing of customer present credit and debit card payments is progressing steadily, with around eight million next-generation cards issued to date. This equates to an estimated one in six of cardholders who have received a new, secure chip and PIN card, according to a quarterly update 'barometer'. On the retailer side of things it is reported that approximately 100,000 businesses accepting card payments have switched over to Chip and PIN.
The Safeway supermarket chain has completed its rollout, and reports that it is accepting an average of 100,000 successful chip and PIN transactions a week across its 480 UK stores.
UK banks have admitted that although the majority of credit and debit card holders will be able to use the new chip and pin technology by the end of 2004, the issue of new chip and pin enabled cards is unlikely to have been completed fully by this time. Latest figures indicated are as follows:
Abbey : 4.5 million issued debit cards all to be replaced by the end of 2004
Barclays: 18.8 million issued debit and credit cards 80 per cent to be replaced by the end of 2004
HBOS: 8 million issued debit cards all to be replaced by mid-2005
HSBC: 6 million issued debit cards all to be replaced by the end of 2005
Lloyds TSB: 13 million issued debit and credit cards 80 per cent to be replaced by the end of 2004
RBoS: 22 million issued debit and credit cards with the majority replaced by the end of 2004
Diners club has announced that it will not be rolling out chip and pin for its cards in the near future. It states that it considers the current fraud prevention measures it puts in place are currently strong enough. Diners Club claims that it is less susceptible to fraud because it has a strong credit scoring process, issues the charge card itself and actively manages the retailer relationship.
Following the successful trial in Northampton, plans for the rollout of Chip and Pin have been finalised. The rollout will happen simultaneously across the country and not region by region. The majority of customer present card transactions are expected to be authorised by PIN before the end of 2004. It is expected that 20% of the population will have been issued PIN enabled chip cards by Christmas 2003 and 50% by Spring 2004.
The final report detailing feedback from the chip and PIN trial in Northampton has now been published. The chip and PIN trial has been declared a great success by the public, retailers and banks with 83% of the public in Northampton in favour of chip and PIN. By the end of the trial over 200,000 chip and PIN credit and debit cards had been issued, 1000 merchant outlets had taken part and 180 cash machines had been updated with the new chip and PIN technology. In addition to the security and fraud beating benefits, chip and PIN has proved to be an efficient and customer friendly system.
Get a free electronic copy of the final Northampton Chip and PIN@POS trial report.
The first offical report detailing feedback from the chip and PIN trial in Northampton has now been published. Highlights of lessons learned from the PIN @ POS trial in the report are:
Get a free electronic copy of the 'first findings' Northampton Chip and PIN@POS trial report.
There are now over 600 retailers in Northampton involved in the chip and PIN trial, with over 180,000 chip cards issued. . WinTI is running with chip and PIN in the Northampton trial at all:sports, JJB Sports, Pets at Home and Ann Summers. Feedback so far on chip and PIN has been very positive and the acquirers will be looking for an aggressive rollout of chip and PIN technology when the trial is over.
The Verifone SC5000 chip and PIN pad device has been tested and approved for use with Commidea WinTI software. Interface development is now also complete to the Dione Extreme terminals, with development underway for devices from both Trintech and Hypercom. Interfaces to Ingenico Fortronic are expected in 4th Quarter 2003.
Initial feedback from the chip and PIN trial in Northampton has proved that the technology works and that consumers and retailers are happy and confident with the PIN@pos process. Further information is available from the PMO's Northampton Trial Presentation given at Retail Solutions 2003.
The UK Chip and PIN trial is now underway in Northampton with the first Chip and PIN transactions taking place on the 19th May 2003.
Stores already taking chip and PIN include ASDA, Dolland and Aitchison, Gamestation, Holiday Inn, Phones 4U, Safeway, Tie rack and Vodafone with a total of around 1000 outlets due to join the trial which runs throughout May, June and July.
Around half of the people in Northampton postcodes NN1 to NN7 have been issued with new style chip and PIN cards which allow entry of the PIN at the point of sale to authorise the transaction rather than a traditional signatue. Around 150,000 people in total are due to be issued the new cards in the coming weeks.
The introduction of chip and pin technology is due to take place over the next 2 years for UK Retailers who process credit and debit card transactions in a face-to-face (Cardholder Present) environment. The first bank trial of the chip and PIN technology is due to take place in Northampton in 2003. Following the trial the banks are looking for an aggressive adoption of the new credit/debit card chip and PIN technologies by UK retailers. It is expected that magnetic swipe and chip & PIN will coexist for many years yet, but in January 2005 the liability for fraud will pass to the party that is the 'weakest' part in the chain. What this means is that if the card taken supports chip and PIN and your acquiring bank supports chip and PIN but you are only using a magnetic swipe, then if the transaction turns out to be fraudulent then you will have to bear the cost.
Under this new scheme announced by the Association for Payment Clearing Servives (APACS) with full support from all UK banks and card issuers, cardholders will be required to enter their PIN on a special keypad located close to the Point-Of-Sale. The introduction of this scheme will effect the majority of face-to-face transactions and will remove the responsibility of shop staff to confirm the identity of a card holder and to compare the customer signature to that on the card.
It is hoped that the introduction of PIN @ POS will reduce the current level of fraud, decrease the amount of time it takes to process a credit / debit card transaction and therefore reduce the cost associated with processing cards for merchants. Merchants will also no longer have to store copy vouchers for transactions that have been processed with chip and PIN.
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