Internet Changes Everything

High street stores to miss chip and PIN deadline

Retailing, retail news, Times Online

y Sarah Butler
FIFTEEN per cent of British retailers — including big names such as B&Q and Waitrose — have still not upgraded their till payment systems to accept chip and PIN, more than a year after the payment security system was introduced, exposing them to liability for fraud.

From February 14, retailers will be allowed to turn away customers who cannot remember the personal identification number for credit and debit cards with a chip.

APACS, the British trade association that handles new technologies in payment and bank anti-fraud systems, said that about 90 per cent of credit and debit cards have been upgraded to include the chip technology and that most customers will need to learn their PIN.

However, customers will still be able to use their signature to verify credit and debit cards at those stores that do not have the chip and PIN technology in place.

A spokesman for APACS said: “It is possible that fraudsters will start targeting those shops that don’t have chip and PIN.”

Retailers who do not have the system in place have been liable for fraud on chip- enabled credit and debit cards used in their stores since January last year.

About £504.8 million was lost in fraud on credit and debit cards in 2004, according to Card Watch, a banking industry association, a 20 per cent rise on the year before.

In the first half of last year, total fraud fell, partly as a result of the rise in use of chip and PIN machines.

Despite that, many well-known high street names have yet to update their systems. B&Q is in the process of upgrading its entire epos system, as the previous one was not compatible with chip and PIN, and will not be fully ready by February 14. A spokesman said that it expected to complete the rollout of chip and PIN by April.

Clinton Cards is not expected to have a chip and PIN system running across all its stores until the end of May.

Barry Hartog, finance director at Clinton Cards, said that the company had not put money into the technology at an earlier stage because the level of risk from fraud was not sufficient to justify the investment.

Many small retailers or those with low levels of card usage are also likely to take time to introduce the chip and PIN technology because the investment costs outweigh their potential liability.

However, Mr Hartog said that a separate demand from banks for online authorisation of credit transactions above a certain amount meant that Clinton Cards would have to introduce new electronic tills from April 1.

Waitrose, which has had problems implementing new till systems, has chip and PIN running in a quarter of its branches. It is hoping to have chip and PIN in place at all stores by next week.

Bhs, the department store chain, will not complete the upgrade of its till systems until August.

PLASTIC POWER
# The average person has 2.3 credit cards and 1.2 debit cards
# The average person uses a debit card ten times a month

# The average person uses a credit card between two and three times a month

# On average, we spend £25 per transaction on a debit card and £65 per transaction on a credit card

# About 100,000 chip and PIN cards are already in circulation for disabled and elderly customers

# Britons make 85 ATM transactions per second

# In December, Britons made a record 235 card transactions per second

February 4, 2006 at 05:09 AM in Payments | Permalink | TrackBack (18) | Top of page | Blog Home