When the PIN is mightier than a pen 

Source: ONE NewsATM keypad

Your PIN, not your pen, will become the form of confirmation for card payments as signatures start to be phased out from next year, a leading card issuer says.

Visa general manager for Australia and New Zealand Chris Clark said the use of signatures to approve payments was being slowly eliminated to lessen card fraud and would completely replace personal identification numbers (PIN).

"We want to minimise any opportunity for card fraud at point of sale," Clark said.

"We are moving to that point by 2013 and it will be PIN and card chipping.

All new Visa credit cards issued from January 2010 will have embedded smart chips to increase security in consumer transactions, with debit cards and reloadable prepaid cards being upgraded from a year later, Clark said.

"The migration from signature to PIN will allow us to take full advantage of the protection provided by chip card technology," he said.

Clark said the new cards would improve the speed of transactions for consumer and banks.

"Chip technology will also offer banks and merchants the ability to provide their customers with benefits such as faster transactions, innovations such as contactless payments and the opportunity to store information such as reward programmes on their cards," he said.

Clark said the improvements in security measures would provide consumers with more confidence in their card transactions and to lower the occurrence of crime including counterfeit, skimming and online fraud.

"While card fraud in Australia remains low by world standards, overseas criminals are becoming more increasingly active in seeking out new arenas," he said.

"The time is right to take advantage of the new technologies available to work across the industry, with banks and merchants, to strengthen security across the board."

Clark said the introduction of chip cards with PINs had led to a fall in counterfeit card fraud overseas.

Fraud losses at UK retailers fell by 35 per cent between 2005 and 2008 following the introduction of compulsory chip and PIN in 2006.

Domestic counterfeit fraud on Malaysian-issued Visa cards fell dramatically within a year of the introduction of chip cards in 2005, Clark said.

"Malaysia was quite spectacular," Clark said.

"It was a government mandate and that resulted in just about the elimination of counterfeit fraud in a relatively quick time," he said.