Chip and PIN

The British are famed for chips with their fish, but now it seems (micro)chips are everywhere. Leaving aside worries of biometric data being stored in ID cards, chips have been standard in debit and credit cards for a while.

Since the introduction of chip and pin machines in more and more shops, you now no longer need to sign for credit/debit card transactions - instead you can simply type in a four digit pin as you would at an ATM. Anyone who regularly uses credit/debit cards will probably have tried this themselves. What you may not have been aware of is that as of 14/2/06 you'll no longer be able to sign for purchases - you'll need to know your PIN.

In fact, this isn't entirely true. I've just seen a report on Newsnight that suggests it's banks imposing chip and pin, but it's still largely up to individual shops whether they let us sign or not. Some - the report picked out Clinton Cards (though I don't know whether this applies to the whole chain or only a particular branch) - aren't even ready for chip and pin. What's actually the case is banks will hold shops liable for any fraud if they allow customers to sign - so, needless to say, there will be increased pressure on customers to use their pin.

Until I saw it on the news (very) recently, I'd hardly heard anything of this compulsory switchover date. I had had a few emails, and even perhaps a letter, from my main credit card provider (Egg) but that was it. I don't think everyone could rely on this, as neither of my other two banks have contacted me as far as I recall. If so dramatic a shift is being introduced, in a relatively short space of time, I think it could've been better publicised.

Anyway, chip and pin is clearly here, and what's more presumably here to stay - at least, until we get fingerprint/iris scanners in all shops or something… The question is, is it a good thing?

I try to use my credit card as much as possible. Aside from eliminating the hassle of carrying cash and frequent trips to the cashpoint, I get cashback and purchase protection. What's more, I've been using my pin for most transactions in the last few months. So far, the practice hasn't changed my initial views.

*Pluses*

Pin is (supposed to be) more secure.
Pin is (claimed to be) faster.

*Minuses*

Pin is something else to remember.

As the qualifications above suggest, I'm not entirely convinced by the supposed advantages. I'll now turn to evaluating the supposed pros and cons of the pin system:

Security

The pin is supposed to be more secure than a signature. I'm not entirely convinced by this. It's true your pin is much harder to discover than a signature. Unless you use a different signature for letters and credit cards, then an awful lot of people will probably get to see your signature - and besides, another example is conveniently on the back of your card. While signatures are supposed to be distinctive, if yours is rather scribbly (like mine), then it's probably relatively easy to fake - and given cashiers sometimes don't even check, let alone carefully anyone could use your card signature. When it comes to your pin, someone is very unlikely to guess it, so it's pretty secure. The only problem is if they do get your pin (e.g. because you write it down) then they can use it just as easily as you.

Speed

Using the pin is also supposed to be faster, though I don't really see how. It doesn't take long, but nor does signing my name (unless one has to search ages for a pen). I'm not buying this one, I don't think there's any real difference. Indeed, the need for pins could lead more people to write cheques - which as a former checkout operator I hate, and which are certainly slower than simple card + pin or signature.

Memory

The pin is indeed something else to remember. I already have lots of things to remember. I have four credit/debit cards (different pins), e-banking log in numbers, a four digit security code to get into my flats (changed termly), a combination bike lock… And that's just numbers, to say nothing of email passwords etc. This is a lot to remember. I've already hinted that so much can lead people to write things down, only making them less secure. One the other hand, the fact is I do remember all this. If you use your pin regularly, you probably won't find it too hard. (I can also check my pins through internet banking, though this presumably depends on your provider).

I should add two things: Firstly, you can change your pin to an easily memorable number (I suggest not anything too obvious like 1234, year of birth, etc though). Secondly if you forget, your card is locked after three incorrect attempts. To change your pin or unlock your card, simply insert the card into a cash machine, type your pin (correctly), select 'pin functions' (or some such) then either just wait or enter a new pin. I managed to lock my card in Tesco after mis-keying, and the retrieval process was relatively pain-free.

Conclusion

As you can see, I'm not particularly persuaded by either the advantages or alleged downsides of chip and pin. The banks seem to think it will reduce fraud though, and that's good enough for me. While it may seem a bit different at first, it'll soon be second nature, and since it's probably here to stay we'd best get used to it.

p.s. One thing I didn't mention is that - just as you wouldn't sign before - you don't need to enter your pin for online transactions.