Ten years since the introduction of chip and PIN, new figures released by the UK Cards Association reveal that almost four in every five pounds of spending at British retailers is now made through debit and credit cards. Introduced to combat fraud on lost and stolen and counterfeit cards, the changeover to chip and PIN became compulsory on February 14, 2006.

When the switchover in 2006 occurred, only 55 per cent of retail spending was made on payment cards, compared to the 78.5 per cent recorded in December 2015. Since chip and PIN’s introduction there has been a reduction in High Street fraud, with annual counterfeit card fraud losses alone down £81.9 million between 2004 and 2014.

Contactless cards are a particular success of the chip and PIN system, which was specifically designed to enable future innovation, the association noted. It has also enabled card payments to be processed by mobile retailers and in unattended environments. Forecasts for spending suggest that the amount spent on debit and credit cards could reach £901 billion in 2024.

Richard Koch, head of policy at The UK Cards Association, stated: “Chip and PIN was introduced a decade ago to combat the rising levels of counterfeit and stolen card fraud in the UK. This was the biggest change to consumer behaviour since decimalisation [in 1971], and it has been hugely successful in tackling counterfeit cards and reducing the threat of fraudsters using lost and stolen cards on the High Street. The introduction of chip and PIN was a break with an 18th century system which relied on signing pieces of paper to authorise a payment.”

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