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A ten year love affair with Chip and PIN

13 Feb 2016 00:01

  • Use of pin with all Chip and PIN card transactions has been now mandatory for a decade, first introduced on Valentine’s Day, 14th February 2006
  • Barclaycard, which celebrates its 50th anniversary in June, was the first payments company to trial Chip and PIN cards in the UK in 2003 
  • Chip and PIN is still one of the most popular payment methods, accepted by 75 per cent of UK businesses
  • However, almost half of people now prefer contactless payments, with ‘touch and go’ spending up 164 per cent last year

The use of four digit PINs with credit and debit card payments - the most secure technology of its time to fight fraud - has now been a requirement in the UK for 10 years. However, newer payment technologies, such as contactless are becoming increasingly popular, with consumers having more choice about how they pay than ever before.

In 2003, Barclaycard was the first card company to introduce Chip and PIN cards to the UK, launching the largest trial of its kind anywhere in the world in Northampton, which was designed to speed up the payment process and increase the security of point of sale card transactions.

Recent research by Barclaycard* found that Chip and PIN is now a ubiquitous form of payment among business, with 75 per cent of merchants processing sales made this way.

Since the launch of Chip and PIN, Barclaycard, which now processes nearly half of all credit and debit card transactions in the UK, has processed billions of credit and debit card transactions and now has over 300,000 terminals across its acquiring estate.

However, the use of newer payment technologies is rising, with spending made using contactless – where consumers simply tap their credit or debit card to make payments of £30 and under - jumping 164 per cent last year**. A third (34 per cent) of merchants now takes contactless payments, with a further one in five (17 per cent) planning to start accepting this in the near future. One in four (23 per cent) now also accepts mobile payments.

The move from businesses towards newer types of payment technology like contactless will come as welcome news to time-pressed consumers, with almost half (48 per cent) now saying that ‘touch and go’ is their preferred payment method and one in five (19 per cent) feeling annoyed if they can’t pay by contactless.

Tami Hargreaves, Commercial Director, Digital Consumer Payments at Barclaycard said:

“The payments industry is continuing to advance at such a lightning pace that it’s easy to forget the days of magnetic stripe cards and the clunky carbon copy ‘zip zap’ machines. While ten years ago Chip and PIN was seen as revolutionary for speeding up the transaction process, the recent rise in contactless has made buying and selling even faster, making it a win-win for both shoppers and retailers.

“In the fifty years Barclaycard has been in business we’re proud to have been a leading innovator in the payments space, bringing new and secure technologies to both businesses and consumers. We’re looking forward to what the next half century will bring!”

In June 2016 Barclaycard will celebrate its 50th anniversary, marking fifty years of allowing consumers and businesses to make and take payments simply and easily. From introducing the first credit card to the UK in 1966 and the first credit card for women in 1973 – to providing the technology to allow commuters to pay contactlessly for travel on London’s tubes, trains and buses – Barclaycard has a played an integral role in developing many new payment innovations which have changed the way we shop for goods and services.

The world’s largest Chip and PIN trial

Barclaycard issued Chip and PIN cards to over half of the adult population of Northampton and worked with local merchants in the town to deploy Chip and PIN terminals. The trial was the largest of its kind anywhere in the world, with almost 1,000 businesses taking part, from pubs and restaurants to hairdressers, florists and jewellers, as well as retailers such as Asda and Safeway. The success of the trial helped to establish Chip and PIN as the most secure technology of its time to fight fraud. An industry-wide rollout followed later that year, with the use of four digit codes when making point of sale transactions via a credit or debit card later becoming a requirement on 14th Feb 2006.

Barclaycard Contactless facts and figures**

  • Contactless spend leapt 164 per cent by value and 135 per cent by volume in 2015
  • Strong annual contactless growth in 2015 follows year-on-year spending also doubling in 2014 
  • Barclaycard customers now make more contactless transactions in a single calendar month than were made in the whole of 2013 
  • Average contactless transaction value has risen 26 per cent to £8.65 following the contactless payment limit rising from £20 to £30 in September 2015 
  • More than a quarter of active Barclaycard customers (27 per cent) use contactless every month
  • One in five shoppers (19 per cent) feel annoyed if they can’t pay by contactless

*An online survey of 305 retail business owners aged 18+ was conducted between 25th and 27th August 2015. A separate online survey of 2,003 UK adults aged 18+ was also carried out between 25th and 27th August 2015. Results have been weighted to nationally representative criteria. All research was conducted by Opinium Research.
** Barclaycard data comparing 2014 to 2015 contactless spending. 2.6 times annual spending increase is calculated as follows: (2015 total Spend figure – 2014 total Spend, divided by 2014 Spend).
*** Barclaycard contactless data alongside online survey – see *.

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