Chip & Pin Celebrates 10 Years With A UK Card Spending Increase!March 21, 2016
Last week, on 14th February 2016, Chip and Pin celebrated its tenth anniversary. It is hard to believe it has been ten whole years since the move was made; indeed in 2006, it was the biggest change we had seen in the way we can pay since 1971’s decimalisation (converting to the decimal system).
Chip and Pin technology was introduced as part of an increased drive to combat card fraud and was rolled out by both banks and retailers bit by bit, month by month in the lead up to February 2006. By the time the 14th came around, all transactions had to have moved across to Chip and Pin.
A new report, which has been published by UK Cards, investigates Chip and Pin’s legacy and details how it can and will impact on the future of card payment methods.
The report shows how British consumers now spend almost four of every five pounds using their debit or credit cards, which is a huge shift from back in 2006, where only 55% of transactions at retailers were made on debit or credit cards. This figure has now increased to 78% (Dec 2015).
The report also shows how, since Chip and Pin was introduced, there has been a decrease in counterfeit card fraud, with losses reducing by £81.9 million in a ten year period between 2004 and 2014.
Head of Policy at The UK Cards Association, Richard Koch, stated that Chip and Pin has: “been hugely successful in tackling counterfeit cards and reducing the threat of fraudsters using lost and stolen cards on the high street.”
One of Chip and Pin’s greatest successes is the more recently introduced contactless card technology, which has revolutionised the speed and ease of transactions, especially by mobile retailers, who used to have to rely on cash payments but can now use mobile card readers, or even apps installed on their smart devices. Contactless cards are now reported to account for a tenth of all card transactions.
Chip and Pin technology has also given retailers a lot more flexibility, enabling them to take payments from anywhere in their store thanks to mobile points of sale (i.e. smart phones, tablet etc.) instead of relying on stationary payment tills.
The amount being spent on credit and debit cards is now predicted to reach a sum of £901 billion by 2024! As more and more money is spent using credit and debit cards, an increasing number of people will no doubt enquire as to whether the technology can keep up. However, the design of the Chip and Pin system was designed with the future in mind, i.e. it is adaptable and will enable innovation.
Richard Koch emphasises this, stating: “Chip and PIN was deliberately designed so it could deliver significant technical innovation and these successes have included contactless and mobile payments, which use the same robust security features.”
Koch certainly believes Chip and Pin technology will keep up with demand and is very certain it has a future: “Chip and PIN was world-leading in 2006 and is the envy of many industries. It has proven both a huge success and a great foundation for the future.”