ID wins Chip and Pin contract

SMART-CARD company ID Data has won an exclusive contract to design and develop 'Chip and Pin' cards for Citibank in the UK.

Banks are hoping to slash fraud by introducing microchips on cards that need customers to tap in a personal identification number at shop tills. Similar systems have had success in Australia and France in recent years.

By the end of the year, all major retailers will have pin pads at checkouts.

The deal with Citibank, the world's largest bank and card issuer, will generate additional revenues for ID Data of between £2m and £3m over the initial two years of the contract.

ID also said it has also now begun production for GE Capital, the UK's biggest store-card supplier. It announced the extension of the contract with Electronic Data Systems to supply chip cards for the Post Office Card Account. The contract will now run until April 2010 and the extension will earn an additional £8m.

The Post Office card has gained approximately 4m users since its launch in April 2003 as those receiving Government benefits adopt 'smart cards' offering other banking services alongside state payments.

ID Data said up to 19m cards could be needed over the life of the contract.

The firm's Aim-listed shares rose 6% to 5 1/2p.