Chip and Pin Rule going into effect on February 14, 2006

After Valentine's Day of 2006, all Chip and Pin cards are supposed to require you to enter your pin to complete a transaction. My local grocery store (Budgens) has said that they are not going to accept any swipes at all as of Feb 1, 2006.

I keep trying to ask whether foreign cards will be accepted, since we don't have chip and pin cards, and we generally get the answer no.

I did some research on this and it looks like technically they should accept a swipe card as long as it doesn't have a chip in it. However, all the cashiers have obviously been told "NO SWIPE". I think it's going to be an issue to get them to allow it, even if technically they're supposed to.

Does anyone know more about this or have done their research? If someone knows specifically about Budgens, I'd like to hear!

Trust Budgens! I don't exactly know the amswer to your question but I do know my UK switch card does not work in "chip 'n' pin" systems in other countries (Australia & New Zealand) so I think it unlikely that an overseas "swipe" card would work as a "chip'n'pin" here (god why couldn't it just be called eftpos here like the rest of the world?!).

It doesn't seem logical that they would all of a sudden ban any foreign tourists from purchasing things though! What would a US visitor do.

I work for a credit card company (spit!) and we will be issuing non-Chip and Pin cards to customers who have disabilities and are unable to use them.  If the card does not have a chip (foreign cards), or if the card tells the retailer to take the signature (chip and sign cards) then they should be accepting the signature (as the existing rules on fraud chargebacks applies to non-Chip and Pin transactions).

Of course, you're going to get muppets who work behind the counter who only know "no signature" - in this case, some amount of perserverence and asking to speak to the manager may be required.

OK I am sure this is a stupid question but I have no idea what a chip and pin card is? I use my US debit card when I visit... I have a Pin number so use it to get cash, will I just not be able to use it for purchases? Sorry I am lost here. 

C+P is the new way to authorise purchases in the UK.  Instead of signing for your purchase, you put your PIN number into the machine.  Similar to buying stuff with your ATM card in the US (I think you can do that?) but a bit more secure.  Instead of the card being swiped, it is put into a machine and a little gold chip on the front of the card is read.

It's supposed to reduce fraud, as a signature on a card can be forged, but you'd have to know the PIN to use a stolen C+P card.
If your card doesn't have a little gold chip on the front of it (i.e. it's a foreign card), then you shouldn't be asked to put a PIN number in when you buy something.  The retailer will swipe the card as normal and you'll sign for the transaction.

This is the theory.  From Feb 14th you may get idiots who haven't been trained properly asking you if you know your PIN before they swipe your card, or refusing to accept your non-chip card.  In this case you tell them it's a foreign card, and if they put it through their system it will work with a signature.  If they continue to gawp at you with their mouths open, ask to speak to the manager.

Thanks for your reply, I was getting a bit nervous about the whole thing!

I can forsee a number of problems with people using foreign cards, so I'll give you guys a bit of background as to why the C+P system has been introduced, and why a shop should have no problems accepting a signature on your non-C+P card...

Previously, if someone fraudulently used a credit card, as long as the merchant computer had authorised the transaction, and the signatures on the card and the receipt matched (sometimes this wasn't even required), then the cost fell on the bank, i.e. the credit card issuer footed the bill for the fraud.

To cut their fraud bill, the credit card companies started the Chip and Pin system, whereby you'd need to enter a PIN (harder to find a PIN than forge a signature) for transactions.  The chargeback system was changed so that if a retailer accepted a signature from a customer who had a C+P card, and the transaction turned out to be fraudulent, then the retailer footed the bill for the fraud, and not the credit card company.

Crucially for you foreigners, any transaction which could not be put through as C+P (either there is no chip on the card, or it is a special card with a chip which tells the retailer to accept a signature - for people with disabilities) would still be treated the old way if fraud occurred.  That is, if a non-C+P card is used for fraud, then the credit card issuer foots the bill for the fraud.

Now, from Feb 14th, all the retailers in the country with C+P have decided they don't want to have to pay for fraudulent transactions, so if a customer has a C+P card then they will have to put their PIN in to pay for goods.  If the retailers follow this rule, even if the transaction turns out to be fraudulent, the retailer won't have to cover it, the credit card company will.


So, from Feb 14th, retailers will be reluctant to accept a signature for a transaction, because if it's fraudulent, they'll have to pay the cost of it.  But this ONLY applies to C+P cards.  If the customer does not have a C+P card, then if they turn out to be a fraudster, the credit card company pays the bill - the way it always was.

Perhaps armed with these facts, you'll be able to tell a retailer exactly why they should accept your foreign card, and why they should not be worried about any fraud chargebacks.

my UK british airways- Amex card has a chip + signature.  i'm fully expecting some silly shop assistants to refuse to take the card b/c there's no pin.  we'll see how it goes....

Thanks for that background elyl.  I keep wondering why it has taken the UK so long to get this system given they have had it in New Zealand and Australia for about 15 years now.

I hate using chip and pin. I know it's a good idea to have it but when Im out shopping I never know till the last second which card Ill grab out of my wallet and they all have different pin numbers   

Probably not the safest tactic, but you can change your pin on most cards and why not make them all the same.  Not that I do that 

Change all your PIN numbers to be the same - I know certain people do not recommend this, but it will make absolutely no difference to you.

Basically, if your card is stolen and used fraudulently (even with the PIN), as long as you were not grossly negligent (writing your PIN down and putting it in your wallet, for instance) then you will be liable for nothing.  You'll only have to deal with the inconvenience of doing without your cards for a week, which would happen regardless of whether all your PINs are the same or not.

The banks advise you to have different PINs for each card - that is for their protection, not your's!

When I had a Visa merchant account a good few years ago, the transition was still in progress from manual vouchers to electronic (manual voucher as in take an impression of the card, call the authorization center if the amount exceeded a certain limit, and then forward all the vouchers at the end of the month).     

I remember that the merchant agreements when the electronic "swipe" system was coming into use made it clear that the manual system was still to be used if a card could not be read for any reason, and that so long as it was a valid card then it must be accepted.

I would imagine that the merchant agreements now contain a similar clause that a Visa/MasterCard/AmEx/whatever must still be accepted with a signature if the "chip & pin" operation cannot be completed.     If the manager still insists that the store won't take a signature instead, it might be worth asking him to call his card processing center.

I have US credit cards with PIN numbers that I use to get money from cash machines. When I use them to buy stuff in a shop, the cashier doesn't tell me to use the chip-and-pin machine; instead the cashier always prints out a slip for me to sign. But  when I use my UK debit card in a shop, I'm always asked put the card in the  chip-and-pin machine and type in the PIN number.

So is the PIN from a US credit card different than the PIN from a British card, and do the US credit card PINs not work in the chip-and-pin machines?

By the way, there have been complaints that the rule is going to make it difficult for the elderly and disabled.