Feedback to date shows that it has been business as usual for retailers and consumers over the New Year period with more than 12 million transactions over the bank holiday weekend being verified with a PIN at thousands of retailers. More than 45 Chip and PIN transactions took place every second right across the country.

Cardholders

 THE MYTH: After Christmas, shops that have already upgraded to chip and PIN won’t accept signatures anymore, you’ll have to use your PIN.

THE TRUTH:  If you have a chip and PIN card and you don’t know your PIN, you will continue to be allowed to use signature.  Card companies have put arrangements in place whilst everyone – cardholders and retailers - is getting used to using chip and PIN. This means that when a cardholder cannot remember their PIN the retailer will be prompted by the chip and PIN terminal to check online with the card issuer and they can choose to accept a signature.

THE MYTH: If I haven’t got a chip and PIN card, I won’t be able to use my cards in shops after Christmas.

THE TRUTH: Again, simply not the case.  You’ll be able to use your cards after Christmas, whether they’re chip and PIN cards or not.  In stores that have upgraded to chip and PIN, the terminals will read your cards, and if they’re chip and PIN cards, you’ll be asked to enter your PIN, if they’re old style cards you’ll be asked for a signature. New cards are being sent out by banks as current cards expire, so you don’t need to do anything, your bank will be in touch when your card is due for replacement.

THE MYTH: After 1 January, the liability for card fraud losses switches from the banks to the cardholder.

THE TRUTH: This is absolutely not the case.  With the introduction of chip and PIN there is no change in liability for the cardholder. Consumers remain fully protected from the cost of card fraud and are covered under the Banking Code. From 1 January 2005 there is a shift in liability for some types of card fraud from banks to retailers, but this will not affect cardholders in any way.

THE MYTH: If someone sees me enter my PIN, they will be able to access my bank account. It can’t be safer than signature.

THE TRUTH: Without your card, your PIN is useless to a fraudster. So even if someone sees you enter your PIN, they would also need to get hold of your card without you realising. And of course, before chip and PIN was introduced all crooks needed to do was get hold of your card, practice your signature a few times, and start shopping at your expense. Using PINs is much safer than using signature for the cardholder, and makes life much tougher for the fraudster. 

THE MYTH: All shops must upgrade to chip and PIN by the end of the year.

THE TRUTH: Although retailers accounting for two out of three card payments have already upgraded, there is no legal requirement for businesses to install chip and PIN technology.  It’s up to each company to consider the business case and upgrade at a time that’s right for them. Next year, retailers will pick up the bill for card frauds that could have been prevented if they had upgraded to chip and PIN, which is why many have decided to rollout chip and PIN before Christmas. However, others are rolling out during 2005 at a time that’s more convenient for them.

THE MYTH: The PIN you use at the till is different to the one you use at a cash machine.

THE TRUTH: Again, not true. Each card has one PIN, and you use the same one whether you’re at the till or at the cash machine.

THE MYTH: You have to keep the PIN issued to you by the bank.

THE TRUTH: No you don’t, you can change your PIN to something you find easy to remember at most cash machines, just look for the PIN services option, or contact your card issuer for more information.

THE MYTH: People won’t be able to remember more than one PIN.

THE TRUTH: Research shows that most people don’t have any problem remembering PINs, with only four per cent of people struggling to remember and use them according to Visa. But if you’re one of the few people that does; you should change your PIN to something that’s easier to remember. The chip and PIN website features a handy guide with memory hints and tips, visit www.chipandpin.co.uk/reflib/remembering_pins.pdf 

Of course the more you use a PIN, the easier it is to remember, so as more businesses rollout this will become less and less of an issue. In France, The Netherlands, New Zealand and Canada, people have been using PINs rather than signatures for several years, without any difficulties. There’s no reason why the UK should be any different.

THE MYTH: With chip and PIN, we’re 10 years behind France.

THE TRUTH: While it’s true that France has had a domestic based PIN system for French cards for some years, the UK is leading the way with the introduction of the global chip and PIN technology. We’re one of the first countries to rollout the new, more secure payment technology, and the rest of the world will be following suit over the next few years.  France is currently upgrading its terminals, as are other countries across Europe. This means that when you go travelling, your cards will soon have the same level of protection as they now do at home.

If you do go abroad, make sure you know your PIN for every chip and PIN card you take with you. If you do use your card at an upgraded chip and PIN terminal, you will be asked to use your PIN to verify the sale, and may not be able to use your signature instead if you can’t recall your PIN. 

THE MYTH: All shops must upgrade to chip and PIN by the end of the year.

THE TRUTH: Although retailers accounting for two out of three card payments have already upgraded to chip and PIN, there is no legal requirement for businesses to install chip and PIN technology.  It’s up to each company to consider the business case and upgrade at a time that’s right for them. Next year, retailers will pick up the bill for card frauds that could have been prevented if they had upgraded to chip and PIN, which is why many have decided to rollout chip and PIN before Christmas. However, others are rolling out during 2005 at a time that’s more convenient for them.

THE MYTH: If a retailer has upgraded to chip and PIN but the customer does not know their PIN, then the retailer could be liable for any subsequent fraud. 
THE TRUTH: Banks will continue to accept the liability for these transactions as long as the retailer has carried out the usual security checks.

THE MYTH: If the customer hasn’t got a chip and PIN card, staff at the point-of-sale won’t be able to accept their old cards after Christmas.

THE TRUTH: Customers will be able to use all of their cards after Christmas, whether they’re chip and PIN cards or not.  Terminals will read each card, and if they’re chip and PIN cards, the customer will be asked to enter a PIN, if they’re old style cards they’ll be asked for a signature.  If a business has not upgraded to chip and PIN, customers will continue to sign for goods in all instances.

THE MYTH: After 1 January, the liability for card fraud losses switches from the banks to the cardholder.

THE TRUTH: This is absolutely not the case.  With the introduction of chip and PIN there is no change in liability for the cardholder. Consumers remain fully protected from the cost of card fraud and are covered under the Banking Code. From the 1 January 2005 there is a shift in liability for some types of card fraud from banks to businesses, but this will not affect cardholders in any way.

THE MYTH: The PIN cardholders use at the till is different to the one they use at a cash machine.

THE TRUTH: Again, not true. Each card has one PIN, and it’s the same four-digits whether the customer is at the till or at the cash machine.

THE MYTH: If a fraudster sees a customer enter their PIN, they will have access to their bank account. It can’t be safer than signature.

THE TRUTH: Without the card, a customer’s PIN is useless to a fraudster. So even if someone sees them enter their PIN, they would also need to get hold of the customer’s card without them being aware of it. And of course, before chip and PIN was introduced all crooks needed to do was get hold of a card, practice the signature a few times, and they could start shopping at your expense. Using PINs is much safer than using signature for the cardholder, and makes life much tougher for the fraudster. 

Of course, security is something that’s of primary concern to the cardholder, so staff at the till can make sure shoppers feels safe by looking away when they enter their PIN.

THE MYTH: People won’t be able to remember more than one PIN.

THE TRUTH: Research shows that most people don’t have any problem remembering PINs, with only four per cent of people struggling to remember and use them according to Visa. But if customers are having problems, staff should remind them that they can change their PIN to something that’s easier to remember either at a cash machine, or by contacting their card issuer for more information.  The chip and PIN website features a handy guide with memory hints and tips, visit www.chipandpin.co.uk/reflib/remembering_pins.pdf 

THE MYTH: No one knows the PIN for their credit card.

THE TRUTH: The latest independent cardholder research conducted in November shows that almost three quarters of people with a chip and PIN credit card (73 per cent) know their PIN, and the vast majority of them are confident they could use it at the point of sale.

Of course the more people use a PIN, the easier it is to remember, so as more businesses rollout this will become less and less of an issue. In France, The Netherlands, New Zealand and Canada, people have been using PINs rather than signatures for several years, without any difficulties. There’s no reason why the UK should be any different.

THE MYTH: With chip and PIN, we’re 10 years behind France.

THE TRUTH: While it’s true that France has had a domestic based PIN system for French cards for some years, the UK is leading the way with the introduction of the global chip and PIN technology. We’re one of the first countries to rollout the new, more secure payment technology, and the rest of the world will be following suit over the next few years.  France is currently upgrading its terminals, as are other countries across Europe.  

LINE TO BE TAKEN ON LIABILITY SHIFT

The liability shift comes into force on 1^st January 2005. This has no impact on the customer, but is a Europe-wide shift involving fraud losses on transactions that could have been protected with chip and PIN. In these cases the liability shifts to whichever party (i.e. retailer or the card issuing bank) that hasn’t yet upgraded.  In the UK, because not all customers will have used chip and PIN by 1 January 2005 the banking industry has put in place special arrangements to help shop staff, who can continue to accept a customer’s signature.

This means that if a cardholder cannot remember their PIN on their credit or debit card shop staff will be prompted by the chip and PIN terminal to do a quick online check with the card issuer. The card issuer will check that the card hasn’t been reported lost or stolen and if they give the go-ahead for signature to be accepted then any fraud liability remains with the card issuer - it will not shift to the retailer.

Clearly it is in the interests of everyone that we move to chip and PIN as quickly as possible so its full security benefits can be realised. For this reason shop staff and card companies will actively encourage customers to use PIN as quickly as possible.

The above article is from:

British Shops and Stores Association Ltd

Middleton House

2 Main Road

Middleton Cheney

Banbury

Oxon

OX17 2TN