Chip and PIN will be live across the UK in 2005 in what is one of the biggest ever consumer initiatives, requiring all 100 million UK debit, credit and charge cards to be reissued. Customers will have to key in a Personal Identification Number (PIN) to authorise transactions, and will face the challenge of remembering on average two to three new PINs during a relatively short period.
The first major public trial of Chip and PIN was launched at the beginning of May 2003 in Northampton. Some 200,000 cards are being reissued to the local population, and 1,000 retailers are being equipped to handle PIN authorisation for PIN-enabled cards. The trial has started well, with high local levels of public awareness of Chip and PIN resulting from media coverage. The hardware and software have functioned correctly, and customers have been able to use PINs successfully in stores. Retailers have a powerful incentive to roll out card readers capable of handling Chip and PIN, because merchant acquirers are typically offering a discount on their fees of around 0.1%.
But the situation is in fact not so straightforward. The Northampton trial is very limited. Immediately after the trial, starting in September 2005, APACS plan a gradual national roll-out and reissue of cards. This could mean customers and retail front-line staff face confusion and delays for many months.
How should retailers therefore go about rolling out new card readers, and training staff to handle PIN authorisation?
Retailers need to understand the potential impact on front-line staff and the costs, and weigh this against the benefits, to plan the optimal timing and phasing of roll-out.
