At present, banks pick up the cost for almost all fraudulent transactions taking place, but from January 2005, unless you have implemented a system called chip and PIN, you, as the business owner, will be liable for the costs of any fraudulent transactions incurred from a chip and PIN card.

The UK retail and banking industries have joined forces to create the chip and PIN programme, which ensures that the card is genuine and that the person presenting the card is its true owner. According to the chip and PIN programme, the rules concerning when exactly you will have to pay for fraud committed in your outlet are complex.

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‘But, in general, if fraud is committed with a chip and PIN card and you don’t have chip and PIN-enabled point-of-sale equipment, the bank will not give you the money for any fraudulent transactions. This will be the situation for sales from 1 January 2005,’ it says.

Julian David, vice president of IBM SMB UK, believes that chip and PIN take-up amongst small businesses has been pretty active to date.

No chip & pin = More expense

‘There is a huge amount of fraud out there – the old method of swipe and sign is not very secure. Not supporting the new technology will result in more expense. Ensure you work with a supplier who understands what your requirements are, which could cover areas such as where counters are in shops and ergonomics,’ comments David.

Barclaycard Business is working with customers to establish their needs and help upgrade existing equipment. It recommends that businesses with their own electronic point-of-sale equipment should contact their current software and hardware suppliers to discuss specific requirements for adopting chip and PIN technology.

Portable options

Carl Jones owns The Greyhound Inn in Chester and initially used a static chip and PIN terminal, but found that customers had to walk through the bar to the counter to pay. Jones now uses an Ingenico portable payment terminal.

‘It provides considerable benefits for me and my business. Not only does it stop customers having to wait ages for their bill then queue at the bar, but it also reduces the possibility of card fraud and subsequent charge-backs. Enabling the customer’s card to remain within sight at all times gives added piece of mind,’ believes Jones.