By end-2004, UK card association, APACS, is aiming to chip-enable 42 million credit and debit cards, and to date, one in three cardholders hold a chip and PIN card, according to APACS’ latest ‘barometer’. The rollout of chip and PIN payment systems by major retailers such as Dixons, Asda and Wilkinsons is also fueling consumer adoption of PIN-secured card payments. To date, 305,000 small UK businesses (55 per cent of the total), including restaurants and bars, have gone live with chip and PIN systems, while clothing retailer, Kookai, is shortly to launch a chip and PIN payments solution in its 27 stores across the UK.

Peter Mila, IT director at Kookai, said in an interview with Computer Weekly that the accreditation process was “very time-consuming”, given the “limited testing resources”. For this reason, Mila warns UK retailers to realize that those not prepared now, will struggle to meet the January 2005 deadline for compliance. In a recent survey by Retail Logic, 56 per cent of the 176 ‘tier-two’ UK firms (with a headcount of 10 to 250 employees) cited accreditation and the lack of guidance from banks as major hurdles to their chip and PIN migration. Over half expect to meet the deadline, but Mila warned that this could be over-ambitious.

Visa UK’s Marc O’Brien describes the card scheme’s case for chip and PIN payments as two-pronged, namely to ensure that consumers are confident in the new cards, and to eliminate card fraud at the POS. Although the peak changeover period to chip and PIN may be chaotic for retailers, Elinor Jayne, of the Scottish Retail Consortium, believes most back the new system. Once the PIN-bypass rule, which allows cardholders that have forgotten their PIN to use the card’s mag-stripe for a transaction, is waived, similarly, retailers will see the full business case for dropping signature-based card transactions.

(ePaynews.com)