[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Saturday, 1 January, 2005, 10:21 GMT
Chip and pin change takes effect
Chip and Pin machine
The new system is designed to cut card fraud
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.

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.

Potential flaw

Businesses who have upgraded will be protected for PIN and signature transactions.

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.

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
Forum of Private Business spokesman

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.

'Going well'

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.




  • SEE ALSO:
    Stores face card fraud deadline
    30 Dec 04 |  Business
    'Chip and pin' security warning
    18 Dec 04 |  Business
    Shoppers 'wary' of chip and pin
    15 Dec 04 |  Business
    Card fraud prevention 'pays off'
    25 Aug 04 |  Business
    Q&A: Preventing card fraud
    10 Nov 04 |  Business


    RELATED BBC LINKS:

    RELATED INTERNET LINKS:
    The BBC is not responsible for the content of external internet sites


    PRODUCTS AND SERVICES

    News Front Page | Africa | Americas | Asia-Pacific | Europe | Middle East | South Asia
    UK | Business | Entertainment | Science/Nature | Technology | Health
    Have Your Say | In Pictures | Week at a Glance | Country Profiles | In Depth | Programmes
    Americas Africa Europe Middle East South Asia Asia Pacific