You may have received literature through the door recently from your current credit card provider or be aware of television and radio adverts heralding the arrival of the Chip and PIN scheme, which is currently being rolled out across the country.

What is it?

Chip and Pin is the new way to verify the card user’s identity at POS (Point-of-Sale) transactions in shops, hotels, petrol stations etc. Instead of asking for your signature, the shop assistant or desk clerk will ask you to enter the four-digit pin number, which you normally use with your credit or debit card, on a special keypad. The four-digit code is the same number you would use at an ATM to withdraw cash.

This system is, of course, far more secure as the PIN number is known only to you. The risk of your signature being forged is also eliminated.

How will it affect me?

All major debit and credit cards will have chip and PIN enabled by the end of 2004. You do not have to do anything. When your card is ready to be switched over to chip and PIN, your issuer will be in touch. During the course of the year, you will notice more and more shops asking for your PIN instead of your signature. Some major shops already have the scheme in place.

Why is the system changing?

Credit card crime is a major problem at the moment. Right now, a fraudulent transaction will occur in the UK EVERY 8 SECONDS. This chip and PIN system has been in place in France for over ten years, and since its introduction card fraud has been reduced by a massive 80%, so it’s effectiveness is well proven. A trial also took place in the UK starting last year to good effect.

What if I haven’t received my card yet?

Your new card will be issued roughly when it would normally, that is, near its expiry date, so don’t worry if you haven’t received yours yet. If your card isn’t near to its expiry date, you will still be issued with a new one soon. If you use your current card in a shop with the chip and PIN system in place, the card will not prompt the cashier to ask you for your PIN and you will simply be asked to provide your signature on the receipt as normal.