Chip and PIN seen through a glass darkly

CHIP and PIN would not only make consumers safer, it would speed up queues at the check-out, card group Visa said last year. But little over a month into this brave new world and consumers are confused, if not fearful, and restaurateurs are embarrassed.

It is inevitable that chip and PIN, like any new technology, will have its teething troubles as consumers get to grips with using the technology and retailers realise that what seems fine on the drawing board needs a tweak or two in reality.

Tesco is one of the first UK retailers to embrace chip and PIN wholeheartedly and roll it out in all its stores.

At present, when a transaction is approved, the stores’ machines somewhat confusingly return to a screen saying ‘Welcome to Tesco’ and the checkout assistants have to inform bemused shoppers that their payment has gone through.

Marks & Spencer and Sainsbury’s (although not all Sainsbury’s stores have chip and PIN machines yet) have programmed their machines to offer a more helpful ‘approved’ or ‘declined’ message on screen once a PIN has been entered.

However, it is not just in supermarkets that problems have cropped up. Some of Scotland’s most exclusive restaurants, popular with the financial elite and lunching executives, are embarrassed by the peculiarities of this new technology.

For the time being it leaves the establishments with no choice other than to stand over customers and supervise their use of the portable chip and PIN machines.

Gay Irons, co-owner of Martin’s in Edinburgh’s Rose Street Lane North, said: "In our sort of restaurant, where a lot of customers are busy discussing business, I feel I am intruding and interrupting the flow of their discussions."

However, it has proved necessary to stand over customers while they pay their bills to prevent payment mishaps. Some customers whizzing through the payment process have inadvertently left a 55 tip on a 50 bill, simply because they were not yet familiar with the new technology, which asks for a tip amount, not the total amount.

Irons’ point is seconded by waiting staff at Iggs, on Jeffrey Street in Edinburgh, who have also reluctantly taken to tutoring diners through paying for their meals with a PIN number.

However, Irons is ultimately an enthusiast for chip and PIN and calls it an "excellent idea" because she believes it will help restore faith in the hospitality industry - often touted alongside petrol stations as the most likely place for consumers to have their cards cloned.

Two restaurants - popular with Edinburgh’s financial elite - say that the hand-held machines are causing problems because of the way they are programmed.

That the new technology will ultimately lead to a significant reduction in point-of-sale-based card fraud and greater protection for consumers is a point made by Malcolm Bushell, managing director of Edinburgh-based Ingenico UK.

The firm’s parent group is one of the largest suppliers of chip and PIN solutions in the world.

Bushell believes suggestions that chip and PIN will lead to an increase in shoulder-surfing and street robbery is ridiculous scaremongering.

"It is complete nonsense to suggest there will be more muggings. Most card crime is carried out by sophisticated organised crime groups. These gangs are not going to start robbing people in the street," he says.

Bushell says there is already evidence that chip and PIN is working to reduce the 123m a year of UK-based counterfeit card fraud, and that the criminal gangs are turning their attention overseas.

Sweden and Holland, which are behind the UK in implementing chip and PIN, have seen a leap in their levels of card-clone fraud, Bushell says.

On the issue of shield heights, Bushell says they vary from retailer to retailer because the Association for Payment Clearing Services (APACS), unlike its Dutch counterpart Interpay, did not specify a height for them.

However in APACS’ defence, Bushell says he believes shields will make "no difference" to whether someone is shoulder-surfed or not, since the guard would have to be a foot tall for determined over-lookers not to be able to observe the four-digit PIN being entered. APACS advises that consumers use their free hand to shield the keypad.

The same advice has long been given to people using cash points. However, with research last week from credit reference group Equifax showing that 75% of UK consumers felt vulnerable when using chip and PIN terminals, it is clear that more needs to be done to reassure the public.