Credit card revolution to beat fraud

THE face of shopping is to be changed forever with the abolition of the traditional credit card system. In a revolution to be introduced by major supermarkets and stores - including Marks & Spencer, Tesco and McDonald's - the 40-year-old method of customers signing on the dotted line to prove their identity will be replaced by the inputting of a Pin code. In some cases customers will be asked to provide fingerprints.

The change, which will be introduced across London in the next 18 months, has been brought about by rampant credit card crime which is costing banks £420m a year.

Under the new system, aimed at making cloned or stolen credit cards useless, shoppers will tap a four-digit code into a till machine.

Millions of new-style cards containing computer chips have already been supplied to major banks to distribute to their customers when existing cards expire.

Meanwhile, the major High Street chains are starting to replace old swipe machines with new technology - at a joint cost to banks and retailers of £1.1bn.

Consumers' groups today hailed the so-called 'chip and Pin' initiative as a desperately needed solution to credit card fraud, which costs Londoners an estimated £95m per year.

A Consumers' Association spokesman said: 'It's a valuable piece of consumer protection that we have been fighting many years for.'

A pilot scheme began in Northampton in May. Londoners are being targeted next in the bid to extend it nationally. The new cards will look the same and will still have spaces for signatures so they can be used abroad and to guarantee cheques.

'Roll-out will start probably from September and we have all the banks on board preparing to issue their new design credit and debit cards,' said a spokeswoman for banking body the Association for Payment Clearing (Apacs), jointly spearheading the initiative with the retail industry.

'We're looking at signatures and Pin numbers running side by side over the next 18 months as retailers come on-line to the new system and Londoners get their cards.'

Safeway is likely to be one of the first stores to introduce the new Pin system - all of its London outlets are already fitted with the new technology. Tesco, Asda and Marks & Spencer are among those prepared to follow quickly.

An M&S spokeswoman said trials in Northampton had gone 'very smoothly'.

Apacs communications manager Jemma Smith said: 'It's a massive exercise. There are 120m cards in the UK. It's not a silver bullet to all fraud but it will combat the biggest areas, which are counterfeit and lost and stolen cards.

'France has a similar system but this is global technology, so the French will be upgrading to be compatible with us, while the rest of Europe is likely to follow in the next two or three years.'

Meanwhile, in a similar effort to tackle credit card fraud, a unique fingerprinting scheme is being tested in west London. The initiative, a 'psychological deterrent', requires customers to place their thumbprint on the back of a cheque or credit card receipt. It is already running across Hounslow, as well as in Putney and Uxbridge.

In Hounslow, card fraud between February and April this year was cut to £376,000 from £955,000 in the same period last year.