14 March 2005

In order to further justify the £1 billion plus cost of introducing chip & PIN, companies need to work closely with customers and consider other uses for the new cards, says specialist IT consultancy, Detica.

Although chip & PIN should reduce fraudulent card transactions at the point of sale, an increase in other types of card fraud including card not present (CNP), mail not received (MNR) and identity theft fraud may mean that overall annual fraud losses remain static in the short term.

"In order to realise real business benefits from chip & PIN, organisations should consider the possibility of using the chip to add other valuable services for their customers," says David Porter, Head of Security and Risk at Detica. "The chip in the new cards is a microcomputer with the ability to store and process data, and is not being used to its full capacity at present."

"Chip & PIN card functionality could potentially extend to customer loyalty schemes, travel ticket options or a pre-pay electronic purse for quick and easy small transactions, such as buying bread and milk or the Sunday paper," continues Porter. "In addition, the card could hold records such as contact details and emergency medical information or even serve as a personal organiser with diary and telephone book options."

A chip and PIN card could also hold biometric data to add an extra security layer by verifying that the person presenting the card was in fact the owner of that card. This would mean that even if the card and PIN number were stolen, the user and card issuer would still be protected from fraudulent use.

While the additional potential for chip & PIN cards is great, Porter acknowledges that barriers must be overcome first: "Although many additional functions are technically possible, organisations need to take into account the needs and wants of customers before imposing new technology upon them. Other issues to consider include business requirements, card branding, security and data protection and political concerns."

Porter concludes: "The prospect for adding additional features to chip & PIN cards exists and it is likely to happen in the near future. At the moment, organisations need to start thinking about the business benefits and researching the market so that they are ready to grab the opportunity when it arises."

Nick Miles Text 100 Public Relations Tel: +44 (0)208 846 0700 email: