Credit card skimming in 2003 comprised one-quarter of the UK’s card fraud total of Stg 402.4 million, according to card industry association, APACS. While the UK banking industry is currently spending Stg 300 million to deploy EMV chip-and-PIN cards and POS infrastructure, APACS has warned that the security of chip-and-PIN will take two to three years to kick in. London is already a magnet for fraudsters, who typically buy cloned cards for USD 400 to 700 apiece, and spend an average of USD 2,800 per card over a two-day period before jettisoning the card.
Once EMV infrastructure gains critical mass in the UK, banks are expecting a parallel increase in check fraud as frustrated card thieves seek the next weakest link in the payments chain. The British Bankers Association is already advising high street banks that fraud will migrate from plastic card sources to non-plastic card sources after the adoption of chip and PIN. Check card fraud, ironically, more than halved in the ten years to 2002, to a total of Stg 147 million, but the BBA, Cifa (the UK’s fraud prevention service) and check-cashing firms are working to make consumers aware of an anticipated growth in this fraud.
Harvey Nichols and Waterstones, as the latest major UK retailers to EMV-enable their POS infrastructure, are also taking the opportunity to integrate their respective supply chain and ePOS systems for improved inventory control and store operations. Either way, over 42 million cardholders and 1.5 million retail staff will need to get to grips with EMV chip cards, while more than 850,000 retailer card terminals, 122 million cards and 40,000 cash machines will require adapting for the chip era. Two in five cardholders currently have a chip card, and by December 2004, most face-to-face transactions in the UK will be chip-based.
(The Times) Jul 21 2004
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