Safeway is breaking new ground by becoming the first major retailer in the UK to introduce chip technology in a bid to wipe out card fraud
Supermarket giant Safeway is leading the fight against fraud by fitting new checkout equipment that will completely change the way in which customers pay for their goods by plastic card.

However, the system – which has already been up-and-running in Europe for some time – cannot become fully operational until the major banks determine to take action against the fraudsters.

Safeway has installed new IBM-based checkout equipment at stores in Manchester and across the North West. Under the new system, the payment card never actually leaves its owner's hand. Instead, the user slots the card into a reading machine and then enters a special PIN number that confirms it's actually theirs.

The technology involves banks issuing credit cards containing micro chips to all of their customers, but at the moment only a quarter actually have them. That said, the British banks and retail industry – represented by the Association for Payment Clearing Services – has agreed that, by 2005, all in-store credit and debit card transactions will need to be authorised by the customer keying-in a PIN.

Cited in the Manchester Evening News just prior to Christmas, credit card organisation Visa believes it's essential that the migration to chip-based cards and terminals occurs sooner rather than later. To date, Visa member banks have produced over 20 million of the new cards. Estimates suggest that 80% of payment cards will be based on such technology by mid-2004.

Source

SMT