|
|
The New Chip and PIN Information
Consumer
Chip and PIN Information
Although it is a
clever new system which will foil the fraudsters, chip and PIN
couldn't be easier to use. Instead of
signing a paper receipt to verify a card payment, you will be asked to
enter a four-digit Personal Identification Number (PIN), just like you
do now at a cash machine.
Cardholders do not need to do anything
now. Your card issuer will be in touch when your card is ready to be
switched over. The majority of cardholders will have a chip and PIN card
by the end of 2004. During this year more and more shops, hotels and
other businesses will introduce the new system.
Use this site to answer your queries about using chip and PIN
so you can start to benefit straight away.
What it means for you
A new way to pay!
The way that we pay for things with credit and debit cards is
changing. Over the next twelve months, we are switching to a new system
in the UK, called Chip and PIN.
PIN not Pen
The main difference is that when you go
to pay for anything with your chip and PIN card - in a shop,
supermarket, hotel, restaurant or garage - you will increasingly be
asked to enter a four digit number instead of being asked to sign a
receipt. This number is a Personal Identification Number, better know as
a PIN. It works exactly the same way as when you tap in your number at
an ATM or cash machine to withdraw money.
Chip and PIN system was successfully
trialled with shoppers in Northampton, and a wide variety of store types
and other places where you can pay by card. Based on the success of the
trial, the scheme is now going nationwide. You will be getting a new
card from the company that issues your card during the next twelve
months. Typically, this will happen as your current cards reach their
expiry date.
What do I do now?
You don't have to do anything now! Your
card issuer will be in touch when they are ready to issue a new chip and
PIN card to you
Safety in numbers
You may have seen the advertising for
chip and PIN which started on 15th March. It is backed by the UK's
banking and retail industries and is designed to heighten awareness of
chip and PIN.
Chip and PIN means that purchases will
become more secure as the majority of UK cardholders will enter a four
digit PIN instead of signing to verify card transactions by 2005.
The launch of the advertising coincides
with one in four cardholders already having a new chip and PIN card and
over 167,000 businesses which accept credit or debit cards already
switched over to chip and PIN. The chip and PIN rollout began in October
2003 and by late Spring 2004 it is expected that half of all UK
cardholders will have a chip and PIN card.
The rollout of chip and PIN continues throughout the year and the vast
majority of people will be using the system by the end of 2005.
Cardholders do not need to do anything now as card companies will
contact them when they are ready to issue new cards.
Why we are changing
The chip and PIN solution introduces a
much more secure way for over 40 million people in the UK to use their
credit and debit cards. When the new system is established queues at
tills should also be slightly faster as paying by PIN should be quicker
than by signature.
Credit and debit card fraud is a big
issue. It has increased by more than 30 per cent a year in the UK and
more than £420 million of fraud was committed on UK cards in 2002.
That's more than £1 million worth of card fraud committed every day in
the UK. A fraudulent transaction occurs every 8 seconds. We're putting
in measures which ensure better safety and take away the hassle and
inconvenience of card fraud.
PIN numbers are much more secure than a signature. You can find more
information on this website about choosing a good PIN number and tips on
remembering them!
The Chip and PIN Programme is part of a worldwide initiative. Fraud on
cards is a global problem and the UK is one of the first to put chip and
PIN in place. The system is proven, however. A similar PIN system in
France has seen an 80 per cent reduction in fraud since its introduction
over ten years ago.
How chip and PIN reduces fraud
The magnetic stripe and signature have
been used on plastic cards since 1972 but they no longer provide the
only form of security. Chip and PIN will make payments more secure and
are expected to dramatically reduce fraud losses on UK cards.
There are two elements involved in making a plastic card transaction
secure. The first is to ensure that the card is genuine; the second is
that the person presenting the card is the true owner. Chip does the
former and PIN does the latter. The chip therefore protects against
counterfeit fraud and the PIN against lost and stolen cards and those
intercepted in the post.
Card issuers and retailers are investing over £1 billion to migrate from
magnetic stripe technology to microchip technology. The majority of the
UK's 40,000 ATMs, 120 million debit and credit cards and 850,000
point-of-sale terminals will be upgraded by 2005.
Why chip and PIN is the best solution
Before selecting the chip and PIN
solution, other technology options were investigated. For example,
putting identification photographs on cards has been considered as an
additional security method, but this would be costly and would still
rely on the shop assistant checking the photograph properly. With the
introduction of PIN, the card issuing industry is shifting the
responsibility of identifying the cardholder away from point-of-sale
staff by relying on technology-based methods to help prevent fraud.
Other biometric solutions were also
considered. Fingerprint and iris scanning as well as voice recognition
and dynamic signature have all been promoted as possibilities. However,
due to the sheer volume of card transactions taken every day in the UK,
such technology is not sufficiently reliable or cost-effective to meet
the requirements of the UK card industry over the next ten years. PIN
will therefore be used to identify cardholders for the foreseeable
future.
A Global initiative
The Chip and PIN Programme is part of a
worldwide initiative. Fraud on cards is a global problem and the UK is
one of the first to put chip and PIN in place. The system is proven,
however. A similar PIN system in France has seen an 80 per cent
reduction in fraud since its introduction over ten years ago.
What the chip does
A small microchip is embedded into a
debit or credit card and provides both highly secure memory and complex
processing capabilities. The chip holds the same personal data as the
magnetic stripe (e.g. cardholder name, card number and expiry date) but
also adds a range of indicators and counters which reduce the
opportunities for misuse of the card. Chip technology uses highly
sophisticated processing to identify genuine cards and makes
counterfeiting more complex and expensive; unlike a magnetic stripe
card, the chip itself plays an active part in the decision to authorise
a transaction.
Many credit and debit cards already carry
a chip, which can be identified by the gold or silver coloured contact
pad on the front left of the card. Chip technology provides the
necessary foundation for using PIN as the method of identifying
cardholders at point-of-sale.
Chip security systems are reviewed and updated regularly. The UK card
industry maintains a multi-layered approach to security so that it is
not reliant on any single system.
What your card will look like
Your card will look the same as it does
today except it will have a "smart" chip. The chip itself is embedded
inside the card but what you can see is the silver or gold coloured
square on the front left-hand side of the card. Many cards that are
issued today already have a smart chip. There will be occasions when the
person accepting your card for payment, in the UK and abroad, will not
be able to process a PIN transaction and you will be required to sign
instead. Your card will therefore retain its magnetic stripe and
signature strip on the back.
The consumer trial in Northampton
Chip and PIN trial
The trial of the chip and PIN system
started in Northampton in May 2003 as an initial step toward national
rollout. It involved re-issuing a significant number of Northampton
cardholders with new chip and PIN cards. These included a representative
range of people, including disabled cardholders.
It also involved upgrading point-of-sale terminals at a selection of
retail outlets. A range of leading retailers took part including many
well-known household names.
Why Northampton?
Northampton is representative of the
demographics of the UK. It has a high proportion of people who live and
shop in the same area, is of a sufficient scale for a meaningful trial
and has a good representation of leading high street retailers.
|
|
