Business group urges banks to extend Chip and PIN deadline

The Forum of Private Business (FPB) is calling on banks and credit card companies to allow retailers more time to install Chip and PIN machines.

Under the new Chip and PIN system, when cardholders purchase goods using a credit or debit card, they are required to type a four-digit pin number into a keypad, rather than signing a receipt.

From 1 January 2005, retailers who comply with card issuers’ instructions under the new system will be covered in the event of fraud.

However, those choosing not to adopt the Chip and Pin system will be held responsible for any ensuing losses.

According to a recent survey, 47% of retailers are unlikely to have installed the machines by the January deadline.

Jim Redman, senior research spokesman at the FPB, said, 'Banks must understand that small retailers do not have the manpower or financial resources of major national retailers and are often unsure how to comply with important changes'.

Mr Redman urged small firms to embrace the new system, warning that fraudsters may specifically target those businesses which do not have the new technology.