(by G. Finn)

The usage of chip & PIN payments may lead to inside fraud and unauthorized transfers from bank accounts, specialists say.

London City police warns banks of the possibility of inside fraud within the use of chip and PIN payments as the fraud losses per year cost 3% to 5% of bank turnover. This figure is expected to grow in 2005.

Some British companies already see fraud losses of GDP 110 million daily. Retailers using chip and PIN-secured payments expect to suffer losses from card-not-present fraud up to 40% by 2007. UK Card-not-present fraud losses accounted for as much as 116 billion of GDP in 2003.