What is a chip and PIN card?

Chip and PIN credit and debit cards look the same as traditional magnetic-strip cards but have a microchip embedded. With chip and PIN cards, consumers must enter an identifying four-digit PIN instead of a signature as authorisation.

Why is it being introduced?

Chip and PIN cards should, in theory, combat fraud because the microchip can store information more securely than a magnetic strip, meaning that cards cannot be copied or "skimmed". Verifying a transaction using a PIN rather than a signature also makes it harder for criminals to use lost or stolen cards.

Will the cards really help cut fraud?

The transfer to chip and PIN technology is costing the card industry in excess of £1 billion, so it must be confident that the move will significantly reduce the £500 million a year lost to card fraud. However, the chip and PIN system does have its critics who argue that PINs are no more secure than signatures because they can easily be found out simply by peering over somebody’s shoulder or reading the crumpled piece of paper with the numbers written on that could be found in a stolen wallet or purse.

Other opponents of the scheme argue that the card industry has only adopted chip and PIN technology because it shifts the burden of proof for fraudulent transactions to consumers. Just last month Times Money highlighted a case where NatWest refused to refund a couple who had money fraudulently withdrawn from their account, accusing them of unwittingly disclosing their PIN to a thief.

Does everyone have to use chip and PIN?

No. There are a few exceptions. American Express cardholders will still be able to pay with a signature. Also, the visually impaired or people who may have trouble entering or remembering a PIN can apply for special chip and signature card.

Has every store adopted chip and PIN technology?

No. Estimates suggest that as many as 10 per cent of retailers – including some B&Q and Bhs stores - have yet to adopt the new technology, meaning they will still accept signatures.

I have not received a chip and PIN card. What shall I do?

The vast majority of cardholders will have already received their chip and Pin cards but if you have not don’t panic because your old magnetic strip card will still work and must be accepted with a signature by retailers. If you have not received a chip and PIN card you should do shortly, or you can approach your bank or credit card company. Your PIN number will be dispatched separately.

Are there any tips for remembering PIN numbers?

There are a number of different techniques that might help you remember your PIN. An easy method is to choose a close family member’s birthday. An alternative to remembering the number digit by digit is learning the pattern that you need to trace on the keypad with your fingers. Some people also find it helps to break a four-digit PIN down into two lots of two numbers, for example 75 and 10. Alternatively substitute the letters of the alphabet for numbers, so A is 1, D is 4 and I is 9. However, the word you use must only have letters between A and I in it, eg fade, which would be 6145

People who have numerous different cards can, although the card companies advise against it, choose to change all their PINs to the same number. Contact your card issuer to find out which cash machines will allow you to do this.

Anything else that is useful to know?

You will only be allowed three attempts to enter the correct PIN when making a purchase. If you enter the incorrect number on the third attempt your card will be "locked", meaning you or anyone else who has the card will be unable to use it. To unlock your card you will need to contact your card issuer and go through a series of identity checks. At present you will not have to know your PIN to make purchases over the internet.

Do not, under any circumstances, write your PIN down on your card or in your wallet or purse, because anyone who gets hold of it would be able to empty your account or run up debts to your credit limit.

Where can I find more information?

Chipandpin.co.uk is the card industry's website with everything you could possibly want to know about the chip and PIN revolution.

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