In order to combat increasing credit card fraud, the UK retail and banking industries have joined forces to launch a ground breaking programme called chip and PIN.
Two important processes are involved in deciding whether an attempted card transaction is secure and safe. The first process is to ensure that the card is genuine - this is done by the card chip technology which protects against counterfeit fraud. The second process is to validate whether the person presenting the card is the true owner. With Chip and PIN signing a credit card slip will become a thing of the past. Instead consumers will be asked to tap in their four digit PIN (Personal Identification Number) in order to authenticate the transaction. The PIN will protect against lost and stolen cards and those intercepted in the post.
Chip and PIN terminals are being installed at checkouts across the country and will be of various shapes and sizes. 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.
The new chip technology is intended to help combat the growing problem of what is known as " skimming". This is the process of copying the magnetic strip on the back of cards using a card reader. The credit card is then "cloned" and used to make fraudulent purchases. It is hoped that card fraud, which is currently costing £425m a year, could be cut by two thirds.
The British Retail Consortium and the Association for Payment Clearing Services (APACS), which are co-ordinating the scheme, estimate that more than 40 million UK consumers would be using Chip and Pin cards by 2005.
For more details visit the Chip and Pin website at http://www.chipandpin.co.uk.