Posted by : trraju on Oct 06, 2003 - 07:58 PM WebTechnology

Many UK retailers are unhappy with plans for the national rollout of chip and Pin credit cards, claiming that there is not enough financial incentive to make the switch.
Retailers must install point-of-sale systems needed to support the cards by 2005, or risk becoming liable for fraud costs.

But influential trade body the British Retail Consortium (BRC) pointed to concerns about the cost of upgrading retail point-of-sale infrastructure to support the new technology.

Banks are offering a reduction in fees for companies that make the switch, but the amount is insufficient for many retailers, according to BRC retail payments advisor John Simpson.

"BRC supports chip and Pin as the best way to counter face-to-face fraud. But until the majority of members report that they have a satisfactory agreement with their banks to implement the technology, the BRC cannot publicly endorse a national rollout," he said.

The rollout follows a successful trial in Northampton which ended this month.

High street retailer HMV is in the middle of a "huge programme" to upgrade point-of-sale systems in 165 stores, which IT director Andrew Clark describes it as a "colossal pain".

"Switching to chip and Pin is a huge expense for us, and banks get most of the benefit," he said.

A report from the BRC and the Association for Payment Clearing Services estimates the total cost of the move at £1.1bn, with retailers paying about £350m.

Jeremy Wyman, business systems manager at Safeway, explained that the fees charged by banks are individually negotiated, making the case different for each organisation. But he warned that medium-sized retailers could suffer the most.

"The large companies have the clout of a big account, while the small ones use bank-owned terminals," said Wyman.

Patrick Bishop, chip and Pin programme manager at Marks & Spencer, indicated that his company's attitude has changed.

"Our view may have been more negative 18 months ago, but we've now become more keen to stamp out fraud in our stores, as we're aware that card fraud can lead to other fraud issues," he said.

"It is a major expense, but we are acutely aware of the fraud we are subject to if we did not put in chip and Pin.

"It is not necessarily one of the pieces of development in which we would want to invest our time. But it's a cost we probably already see anyway."