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Chip And Pin Past And Present

Sep 9, 2008
After taking the usual approach in the UK and sitting back to see how others manage with a new idea, the Chip and Pin revolution arrived on our shores. This happened after we let the French and Aussies test the waters for 10 years.

The system let UK card holders put their pens back in their pockets as tapping a four digit number into a machine became the new way to authenticate a person's identity. This process also meant a credit or debit card no longer needed to leave the sight of the customer during a transaction, decreasing the potential of fraud occurring while in a strangers hands, out of sight.

The switch over to chip and pin was hailed a success in the first 6 months, with notable reductions in card fraud. But by the beginning of 2007, some flaws had begun to raise their heads, such as when a group of Cambridge University students researching the security of the machine, managed to re programme one to play Tetris. But despite this, figures still show a huge reduction in fraud since the launch in the UK. Once the rest of Europe make the change over to chip and pin then these figures will reduce further, as UK cards can be used without the pin code in Europe where they still use the signature method of validation during purchases. Criminals take advantage of this fact at the moment and once the change takes place would help stop this loop hole.

The chip and pin machine has moved recently from the retail industry to the personal home finance sector, two of the main banks sent their online customers similar devices as those in the shops to access their personal online accounts by means of entering a randomly generated set of numbers. This move is to once again act as another method of dealing with card fraud.

Future plans for the system may include the use of an iris scan or finger print recognition system. This would help in the battle against fraud and make using a card instead of cash during purchases the safest bet. Other ideas being researched are to have one bank card that can store receipts, vouchers, tickets and insurance documents all on its built in chip.
Since launching the Chip and Pin system has;

- Helped reduce fraud
- Sped up the transaction process
- Eliminated Human error associated with signature checking
- Moved into the private online banking arena
About the Author
John McE writes articles on a number of subjects including credit card processing and card payment terminals. For more about chip and pin machines see Cardsave.
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