which will be introduced across London in the next 18 months, has
been brought about by rampant credit card crime which is costing
banks £420 million a year.
Under the new system - aimed at making cloned or stolen credit
cards useless - shoppers will tap a fourdigit pin code into a till
Millions of new-style cards have already been supplied to major
banks to distribute to their customers when existing cards expire.
Meanwhile, the major high street chains are starting to replace
their old swipe machines with new technology - at a joint cost to
banks and retailers of £1.1 billion.
Consumers' groups today hailed the so-called "chip and Pin"
initiative as a desperately needed solution to credit card fraud,
which costs Londoners an estimated £95 million per year.
A Consumers Association spokesman said: "We strongly welcome the
news. It's a very valuable piece of consumer protection that we have
been fighting many years for, so the sooner the better. I'm just
surprised it's taken so long to convince the banks and retail
A pilot scheme began in Northampton in May. Londoners are being
targeted next in the bid to extend the scheme nationally.
Banks will begin to issue new credit cards to customers as their
old cards expire. The cards will look the same and
will still have spaces for signatures so they can be used abroad
and to guarantee cheques.
"Roll-out will start probably from September and we have all the
banks on board preparing to issue their new design credit and debit
cards," said a spokeswoman for banking body The Association for
Payment Clearing ( APACS), jointly spearheading the initiative with
the retail industry.
"We're looking at signatures and Pin numbers running side-by-side
over the next 18 months as retailers come online to the new system
and Londoners get their cards."
Safeway is likely to be one of the first stores to introduce the
new Pin system, with all of its London outlets already fitted with
the new technology. Tesco, Asda and Marks & Spencer are among
those prepared to follow suit fairly rapidly.
The thousands of small businesses that lease their till machines
from the major banks will be also upgraded within months.
An M&S spokeswoman said it plans to introduce the system-by
the end of the year. "We've been very heavily involved with trials
in Northampton and they've gone very smoothly. There has been
overwhelmingly positive feedback from customers who understand that
it is a means of breaking down fraud," she said.
APACS communications manager Jemma Smith said:
"It's a massive exercise. There are 120 million cards in the UK,
because we love our plastic, and most of us have about three cards.
"It's not a silver bullet to all fraud but it will combat the
biggest areas, which are counterfeit and lost and stolen cards. For
the first time in many years we will be ahead of the criminals."
She continued: "France has had a similar system for just under a
decade but this is a global technology that we have created, so the
French will be upgrading to be compatible with us, while the rest of
Europe is likely to follow suit in the next two or three years."
Meanwhile, in a similar effort to tackle credit card fraud, a
unique new fingerprinting scheme is already being tested in west
The initiative, which acts mainly as a "psychological deterrent",
requires customers to place their thumbprint on the back of a cheque
or credit card receipt. It is already running across Hounslow, as
well as in Putney and Uxbridge.
Police, local councils and shops have joined forces to run the
pilot. In Hounslow alone, businesses have already saved more than
£500,000. Card fraud between February and April stood at £376,000,
compared to £955,000 between February and April