A consumer information programme should be undertaken to educate consumers about the "chip and PIN" technology used in the latest credit cards.
Chip and PIN technology is already being used in many European countries to counteract credit and debit card fraud and is being introduced in Ireland this month. Chip & PIN enabled cards require credit cardholders to enter a security PIN number into a terminal at the cash register, instead of signing a receipt slip.
According to Colm Reilly, who works for the PA Consulting technology firm, over three million credit and
debit cards will need to be re-issued to consumers in Ireland due to the chip & PIN security enhancements. From 2005, any retailer who is not Chip and PIN enabled and who is defrauded through a credit card transaction will have to foot the bill themselves, rather than passing the cost onto the bank.
Reilly said that card issuers and the Irish Payment Services Organisation (IPSO) need to co-ordinate their efforts and to send out the right message to consumers.
Newbridge and Naas became the first two towns to introduce the new technology this summer and all Irish financial institutions will begin to replace credit cards with Chip and PIN substitutes over the coming months.
According to a recent survey of 500 consumers in the UK, only one third knew the PIN for all their cards. When asked how they would respond if unable to recall their PIN, 42% of respondents said they would be likely to abandon their purchase and return later, but 38% said that they were likely to abandon their purchase altogether.
Last year in Ireland there were over 150 million card transactions with a combined value of €11.3 billion. An estimated €12 million is lost in Ireland annually as a direct result of credit card fraud.
