It is the UK's biggest consumer project since decimalisation. Yet, there is still major amount of education required, whether it is naïve retailers or set-in-their-ways shoppers.
The big switch in January 2005 transfers the liability for fraudulent transactions from the bank to the retailer if the latter isn't making use of Chip and PIN technologies. In total, 850,000 terminals need to be updated to have TPAD functionality by the end of the year.
A similar switch in France famously reduced fraud by over 80 per cent, yet there are concerns here that consumers won't be as open to the widespread changes to their high street experience.
It is thought that retailers resisting the switch will become more of a target to card criminals wanting 'an easy target'. Not to mention, running the risk of consumers being scared to use their cards in their shops in case they suffer from fraud.
Tier two retailers (such as Goldsmiths and Co-Op) are most concerned about upgrading IT infrastructure than tier one retailers (such as Tesco and Sainsburys) who have the financial weight and smaller, local companies who rely on bank owned terminals. In addition, high value goods retailers, such as the aforementioned Goldsmiths will be more concerned about the liability shift than local newsagents and butchers.
Consumers are becoming increasingly dependent on credit and debit cards, with the average transactional value decreasingly.
Communicating the advantages to consumers is key to a smooth change, it's a small factor but a vital one so stay tuned for more on what Chip and Pin will mean for you.
James White is the international marketing director at retail networking firm Allied Telesyn.