SHOPPERS began testing a new system to combat credit card fraud yesterday, replacing pens with Pins.
Shops, pubs, supermarkets and garages in Northampton, England, started trials of a new chip and Pin system, which is expected to be rolled out throughout the country in the coming months.
The programme, which could be running in Scotland by the end of the summer, will see consumers using four-digit Pin codes instead of signing a receipt when they use credit cards.
The UK banking industry is hoping the system will reduce credit card fraud, which last year cost more than (pounds) 400m.
Figures show a similar system in France reduced card fraud by 80% and it has also proved successful in Australia during the past 15 years.
About 150,000 people across Northampton will be sent new-style cards from their banks designed for the Pin terminals.
The cards have a thumbnail-size microchip that stores personal data more securely than the current magnetic strip, making it harder to counterfeit.
Each new cardholder will have to enter their Pin number into a till machine in order to pay for goods by plastic. Researchers believe it is more difficult for fraudsters to obtain Pin codes than signatures, which are often discarded on receipts.
More than 1000 outlets in the town will continue to test the programme throughout June and July before the system is rolled out across the UK and Europe.
By 2005 almost all credit and debit card transactions will be verified using the Pin code system, which will cost up to (pounds) 1.1bn to introduce.
The programme will see more than 850,000 Pin terminals installed, 122 million cards issued and 40,000 cash machines upgraded.
The first wave includes Safeway supermarkets, Asda, Holiday Inn and high-street names including Dolland & Aitchison, Phones 4 U, Tie Rack and Vodafone.
A spokesman for the Consumers Association in Scotland said that anything that made shopping safer should be welcomed. ''It cuts down the way cards can be used as it's harder for criminals to get hold of a Pin number,'' he said.
plastic progress
Each Briton carries seven plastic cards, on average, a total of almost 330 million are in use around the UK.
Card fraud costs more than (pounds) 1m per day.
To operate the new system across the UK more than 100 million debit, credit and charge cards will need to be upgraded.
The scheme will be rolled out by 2005 but could be introduced to some parts of Scotland by the autumn.
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