Sainbury's is lagging behind its supermarket rivals in the race to implement chip-and-Pin technology, and is set to miss the 1 January 2005 completion deadline set for UK retailers.
Morrisons and Asda have finished their chip-and-Pin roll-out and Tesco has confirmed it is on track to complete by October.
Apacs, the payment clearing organisation which is overseeing chip-and-Pin roll-out across the UK, said that, although there was no legal onus on retailers to upgrade to chip and Pin by the end of the year deadline, failure to do so could prove costly if criminals succeeded in perpetrating credit card fraud on their systems.
An Apacs spokeswoman said, "Any business which owns its Epos system will become responsible for fraud on chip-and-Pin cards which takes place at the point of sale and could have been prevented using chip-and-Pin technology. The bank will no longer pick up the bill."
Sainsbury's this week confirmed that it was likely to miss the Apacs deadline.
A Sainsbury's spokeswoman told Computer Weekly, "Our plans have always been to commence roll-out in September and complete by early 2005, and they have not changed."
She said Sainsbury's recognised the potential threat from fraud, but she added, "From the start of 2005 we will be implementing chip and Pin into more than 60 stores a week, which means chances of this happening decrease very quickly."
Apacs estimated that a retailer without chip-and-Pin systems could face a 20% increase in fraud.
An Apacs spokeswoman said, "As more businesses upgrade to chip-and-Pin, fraudsters will target those outlets which have not yet upgraded. Current levels of fraud are not necessarily indicative of future fraud patterns."
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Key milestones in chip-and-Pin plan
May 2003: Start of the first UK chip-and-Pin trial in Northampton
August 2003: Successful conclusion of chip-and-Pin trial. Banks and retailers agree to national plan for roll-out of chip and Pin
June 2004: Asda completes UK chip-and-Pin roll-out programme
July 2004: Morrisons finishes UKchip-and-Pin roll-out programme
October 2004: Tesco set to complete its national roll-out programme by the end of the month
January 2005: Fraud liability shifts to retailers.
March 2005: Sainsbury's plans to complete its roll-out in the middle of this month.
Comet goes live with chip and Pin >>