Retailers yet to sign up to chip and pin will now be liable for fraudulent transactions as changes to the card payment system come into force.
The new system is designed to cut card fraud
From Saturday responsibility for fraud moves from the banks to those shops who have not upgraded to the new system.
The Association for Payment Clearing Services said a "Europe-wide liability shift" would take place in January and hit shops which have not upgraded.
Shoppers will now use their four digit number instead of signing for goods.
The new hi-tech system is intended to fight the £400 million a year of fraud on credit and debit cards.
Businesses who have upgraded will be protected for PIN and signature
An Association for Payment Clearing Services (APACS) spokesman said shops who had made the upgrade would gain protection "regardless of whether it's an old card or a new chip-and-PIN card, as long as the retailer conducted the same security checks they previously did to ensure that the card is not lost or stolen".
But the National Consumer Council has warned of a potential flaw in the new approach.
It says someone who has had both their card and PIN number stolen may find it difficult to prove that they have been a genuine victim of fraud.
And the move has angered some business groups who claim the banks are pushing through the changes to reduce their own liability before retailers and consumers are ready.
BBC Radio 4's Money Box programme has learnt that many retailers still do not have chip and pin technology installed, while banks have yet to upgrade 53 million cards, about four out of 10.
The Forum of Private Business said the changes - which it described as the
greatest since decimalisation - would result in chaos.
"The FPB has been deeply concerned for some time that chip-and-PIN is being
crowbarred in by the banks, which are desperate to transfer liability for
fraud," it said.
However, APACS have stressed the programme was on course and going well.
A spokeswoman said: "As we start 2005 we're exactly where we aimed to be: over 600,000 of the UK's 860,000 tills have been upgraded to the new, more secure way to pay, and more than three in four of us have at least one chip and pin card in our wallet."
She added that millions of cards will be upgraded throughout 2005.
BBC Radio 4's Money Box will be broadcast on Saturday, 1 January, 2005, at 1204 GMT.