Consumers ignorant about new chip and PIN scheme
Pubs face frustrated customers and loss of trade unless the change to chip and PIN card authorisation is properly communicated to customers.
The switch from customer signing credit card slips to keying in their PIN number at the point of sale is due to be completed by 2005. However, consumer ignorance about the changes, introduced to cut card fraud, could threaten the timetable for the programme, a new survey warns.
Research for Fujitsu Services found that 84 per cent of card users did not know they would need a PIN number to authorise transactions when pub and other retailers change to the chip and PIN system. The study for also found that 28 per cent of card users thought they would have difficulty remembering their PIN.
Andrew Wilson, managing director of retail at Fujitsu Services, said "If the public education programme is not 100 per cent effective, the retailers at the frontline of this changeover will bear the brunt of any customer frustration."
He added that the problem was potentially more difficult for pubs, where customers often paid for a meal or round of drinks after they have been consumed - unlike shops which can just put goods back on the shelf.
At Laurel Pub Company, a spokeswoman said: "Obviously, we welcome any initiative which will reduce fraud and our licensees will all be fully briefed. However, we believe that there needs to be more public information on the change."
The Chip and PIN public information campaign is due to start after the current UK trial of the technology, which is taking place in Northampton. A range of operators, including Scottish & Newcastle, are taking part in trials designed to establish the main issues the public information campaign will need to address.
A spokeswoman for London brewer Fuller's said: "We're aware of the change and our IT department is currently working with our software suppliers to assess the best system for our estate. Nearer the time, we will let customers know that our pubs are Chip and PIN friendly."
Chip and PIN: The facts
- What is it?
Chip and PIN is a credit and debit card authorisation system which replaces the current system using a customer signature.
Why the name?
'Chip' refers to the microchip inserted in the card, 'PIN' is the four-digit personal identification number keyed in by the user.
Why is it happening?
The aim is to reduce the cost of card fraud, £425m last year.
When will it happen?
Banks and card issuers want all tills to accept the new system by the end of 2005.
Who pays?
If you use an authorisation machine owned by a bank or card, it should be replaced. Companies with their own epos or till system will have to pay for the change or upgrade.
What if I don't change?
There will be a cut off date after which you will bear the full cost of any card fraud.
