Banks tackle card crime with ‘smart’ chips

Major retailers, banks and consumers are today beginning a trial of credit and debit cards that will use secure chip technology to tackle the UK’s annual £425m card fraud bill.

Northampton has been chosen as a pilot for the ‘Chip and Pin’ scheme that is intended to be rolled out nationwide to 40 million card holders by 2005. Over 150,000 people in the town will be issued with the new cards with retailers switching to new point-of-sale terminals.

The new cards contain secure ‘smart’ chips that make it harder for criminals to ‘skim’ and make copies for fraudulent use. When using the cards at shops, customers will also key in a four-digit Pin code to authorise the transaction instead of signing a paper receipt.

Sandra Quinn, spokeswoman for the Chip and Pin scheme, said in a statement: “The trial is the first phase of a massive nationwide programme which will see more than 850,000 retailer terminals, 120 million cards and 40,000 cash machines upgraded over the next 18 months. We’re learning valuable lessons in Northampton for the national rollout which will tackle UK card fraud head-on, on an unprecedented scale.”

Retailers already using the new technology in the town include Asda, Dollond & Aitchison, Safeway, Tie Rack and Vodafone.

Graham Pye, store manager of one of the Safeway stores taking part, said in a statement: “Our customers seem to be quite comfortable with entering a Pin instead of signing their names and people are certainly keen that it foils the fraudsters.”

Major card issuers including American Express, Barclaycard, HSBC, LloydsTSB and Visa are also taking part in the trial, which will continue until the end of July when a national rollout will begin.