Take time for chip and Pin roll-out

The key lesson retailers should take from the largest trial so far of chip and Pin anti-fraud technology is the need to allow...

The key lesson retailers should take from the largest trial so far of chip and Pin anti-fraud technology is the need to allow enough time for planning, testing, implementation and training staff, the trial report said.

Chip and Pin, which aims to cut credit and debit card fraud by 50% by requiring cardholders to authenticate purchases with a Pin rather than a signature, is due to be rolled out nationwide by banks and retailers by the end of 2004.

The report on a three-month trial in Northampton, released this week, urged retailers with their own integrated point of sale systems to implement chip and Pin now in order to meet the 2005 deadline, when liability for fraud will shift to them from the banks.

Roll-out will take a minimum of 30 weeks for the majority of organisations that have formal project and budgeting processes and need a tailored system, the report by the Chip and Pin Programme Management Organisation said.

The trial, which encompassed 120,000 cardholders and 1,000 retailers, identified the key activities that retailers need to consider when planning roll-outs as:

  • Understanding the impact on the business, processes, IT systems and staff and estimating the costs and benefits
  • Identifying the business and technical requirements
  • Acquirer acceptance testing
  • Staff training.

Safeway, which was the first UK supermarket to install chip and Pin-compliant systems across all of its stores, said moving early put it ahead competitively.

"It was a new experience for us and our acquirer," said Jeremy Wyman, business systems manager at Safeway. "I am glad that we are now ahead of the game but at times it was tough and no one should underestimate the time and resources needed."

Although the budget for the chip and Pin implementation was "significant", Safeway expects a full return on investment within six months, Wyman said.

From 1 January 2005, retailers without chip and Pin-compliant point of sale systems will be liable for fraudulent transactions.

Chip and Pin trial report: key findings:

  • Time is a critical factor. Allowing enough time for planning, testing, training and implementation is key to success. Retailers need to engage software and hardware suppliers and their acquiring banks early
  • The technology works and there is no reason to delay implementation. Retailers should act now in order to meet the 2005 liability shift date
  • Retailers should consider the needs of people with disabilities early in the process
  • Although customers are positive about improved security and ease of use of chip and Pin, privacy is a concern to some. There are practical actions retailers can take to help remedy this
  • Transaction times are better than in the past and should lead to shorter queue times.

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