Be on your card
The January deadline for licensees to change their tills to Chip & PIN is looming large over the trade. To guide you through the process, Dizziana Rossi reveals everything you need to know about Chip & PIN but were afraid to ask
What is Chip & PIN and how does it work?
Chip & PIN is a safer way to pay for credit and debit card users. Banks are rolling out cards containing a microchip instead of a magnetic strip to replace old-style signature cards. The new cards require a four-digit PIN (personal identification number), only known to the cardholder, instead of a signature, to verify the payment.
Will a signature still be required with Chip & PIN?
The customer will not need to sign except in the case of some disabled cardholders, who may own Chip & Signature cards where a signature is still required. Staff should follow the on-screen prompts, which indicate whether a signature or PIN is required.
When is the deadline for Chip & PIN?
From 1 January 2005, liability for card fraud will shift to any licensee who fails to implement Chip & PIN. The Forum of Private Business (FPB) attempted to extend this timeframe on the basis that many small businesses may not have the time or financial resources to upgrade by then. But the Association for Payment Clearing Services (APACS) says the deadline cannot be extended as Chip & PIN is a European-wide initiative.
What will happen if I don't install Chip & PIN in time?
There is no policing of the Chip & PIN programme and licensees will not be fined for failing to upgrade by the January deadline. An APACS spokesman says: "There is no deadline as such, there is only a liability shift and there won't be punishment for not upgrading. However, it is probable that fraudsters will target those who don't have Chip & PIN terminals in place."
How many retailers have already upgraded to Chip & PIN?
Sixty per cent of cardholders have made the change, according to the national Chip & Pin Programme, which has been appointed by banks and card issuers to oversee the rollout. Figures to October show 520,000 out of the UK's total 860,000 tills have upgraded to Chip & PIN. Meanwhile, 30.8 million cardholders out of a total 42 million have at least one new Chip & PIN card.
Why do pubs need Chip & PIN?
Chip & PIN aims to combat the rise in credit and debit-card fraud, which cost the UK more than £400m in 2003, according to APACS. As well as tackling fraud on lost or stolen cards, Chip & PIN prevents the malpractice of dishonest staff "skimming" cards with card readers to produce counterfeit versions.
How long does it take to upgrade to Chip & PIN?
Timescales vary between nine days and nine months, depending on whether venues hire or own the point-of-sale (PoS) equipment. Small and medium-sized businesses usually rent bank-owned terminals, which are upgraded by the acquiring bank in a matter of days. Larger pubcos owning their own EPoS systems take longer, as the bank must approve and accredit the equipment. A Chip & PIN spokeswoman says: "Larger businesses have to talk to their bank and then to the suppliers about their specific requirements. For example, some wet-led pubs might want to take card payments at the bar only, with food pubs needing a portable system that will allow payment to be made at the table."
How can customers pay while seated at their table rather than at the bar?
Portable terminals are available from all the main banks and are ideal for food-led pubs. The portable equipment allows a business to take the terminal to the customer, enabling them to enter their PIN and process the transaction in seconds.
How do I know which type of system to install?
Leading industry experts warn licensees not to panic-buy equipment to get ahead of the deadline. Tony Payne, chief executive of the Federation of Licensed Victuallers Association (FLVA) says: "I am concerned that licensees might agree to sign a lease on equipment that's not suitable. A lot of people are looking to take advantage of small businesses. My warning to licensees is to speak to your bank first to make sure they get a recommendation on what equipment your venue requires."
Where can I source suppliers of equipment?
The Chip & PIN Vendor Directory lists a wide range of suppliers. If you are hiring the equipment, the directory is available free from the bank looking after your terminals or from the national Chip & PIN programme, www.chipandpin.co.uk.
How much does Chip & PIN cost?
Upgrading to Chip & PIN is free of charge to venues which rent bank-owned terminals. The cost of buying and installing Chip & PIN in a pub or chain of pubs depends on whether existing systems are being upgraded or whether a new system is being installed. A Chip & PIN spokeswoman says: "A number of factors will vary the cost, including how many terminals are needed and what kind. It also depends on the deal you can agree with the bank and the rates on the equipment from suppliers."
Will rental rates increase for bank-owned terminals with Chip & PIN?
The upgrade to Chip & PIN on a bank-owned terminal is usually free and will not affect the rent. Barclays says existing customers only have to alert them that they want to make the upgrade and a simple swap of equipment takes place with no extra rental costs added.
Do I still need Chip & PIN if only a nominal amount of my takings are by credit or debit card?
It is possible that some pubs taking the majority of their payments by cash will not install Chip & PIN. A Chip & PIN spokeswoman says: "Some pubs may know all their credit and debit card users well and take the majority of payments by cash. They might feel that Chip & PIN is not a necessary part of their business and they are under no legal obligation to install it. However, I would point out that they will be liable for any card fraud on their premises and that fraudsters will target non Chip & PIN outlets."
What are the benefits of Chip & PIN?
The main benefit is the responsibility for verifying card transactions lies with the bank or the card issuer rather than the individual. Barclays claims Chip & PIN saves time at the point of sale as staff spend less time obtaining and checking signatures. It also says that customers are put at ease, as portable devices can be taken to them at the table, eradicating the need to take the card out of sight.
Are there any considerations for disabled customers?
Under the Disability Discrimination Act 1995 licensees must consider the needs of disabled people when installing Chip & PIN. A Chip & PIN spokeswoman says: "Licensees should be aware of the different protocol for disabled people, for example those with a Chip & Signature card. Pin pads should also have flexible chords so that they can be moved closer to wheelchair users."
How can I collect tips with the new system?
Customers can either key in the additional amount or add it to the bill for the staff to key in. In both cases, customers enter their PIN to verify the payment.
What about split bills where some cards are Chip & PIN and others are signature?
There will be no change in the process for accepting more than one card to settle a bill, except some cards will require a PIN and others a signature.
Can customers still run tabs on Chip & PIN cards?
An "electronic imprint" of the Chip & PIN card is taken for a nominal amount, such as £1. The customer enters the PIN for verification and the details are stored until it's time to settle the tab.
Top tips on Chip & PIN from Barclays
l Avoid customers being overlooked when entering their PIN reorganise queue lines, move CCTV and teach your staff to look away when a customer is entering their PIN.
l Make sure disabled customers can access your PIN pad invest in a portable PIN pad or a device with a long cable for flexibility.
l Conduct a trial to build confidence this is necessary for staff training and customer awareness, and will
