Banks may not cope with demand for chip and Pin

Banks could struggle to meet a last-minute rush of chip and Pin implementations by retailers, delegates at the Retail Solutions...

Banks could struggle to meet a last-minute rush of chip and Pin implementations by retailers, delegates at the Retail Solutions show in Birmingham were told last week.

Andrew Blatherwick, managing director at retail systems supplier Alphameric, warned that a late surge in demand for accreditations for chip-and-Pin implementations would stretch banks' ability to cope.

His concern was echoed by Barclaycard UK, whose spokesman said that if retailers applied for chip and Pin on mass, it could cause major problems for the banks.

"Retailers need to act now to get accredited in time. Many have left it to the last minute and we are trying to avoid them bunching up," he said.

Apacs, the UK trade association for payments, agreed. With just six months left before liability for fraudulent transactions passes to retailers, the association also warned of the danger of log jams if retailers delay their roll-outs until later this year.

The accreditation process can take up to two months to complete, depending on the type and size of the retailer, and involves an upgrade to the entire network infrastructure to achieve chip and Pin compliance.

Medium-sized retailers could face most difficulties, as many smaller retailers rent card validation equipment from their banks, which are promising them chip and Pin-compliant managed services.

Is chip and Pin a diversion?       

Chip and Pin implementations and radio frequency identification tags have deflected retail IT directors' focus from meeting customer needs, said Fraser Davidson, director of retail and distribution for northern Europe at IBM, at the Retail Solutions show.  

"The banks are forcing retailers  to convert to chip and Pin, but these changes do not affect the customer. The focus has shifted from the customer to the basic plumbing of the IT systems," he said. 

But Colin Grannell, managing director at Visa UK, said chip and Pin would enhance the customer experience and had many more benefits beyond security. 

"Chips are not just for fraud but to provide more services offline, more self-service and give more payment options on one card. We are very positive that we will see a return on investment from chip and Pin," he said.

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