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Earlier this year, local banks have started to issue CHIP and PIN cards, which will gradually replace all old-style magnetic stripe cards in circulation. This major move is being driven by the Single Euro Payments Area (SEPA) project, which calls on EU banks to migrate all cards issued by them to CHIP and PIN technology by the end of 2010.

 

CHIP and PIN consists of a payment card containing a smart chip that requires the use of a four-digit PIN (Personal Identification Number), known only to the cardholder, as the method of cardholder verification at the point-of-sale. Therefore instead of the cardholder signing a paper chit to verify payments at the point-of-sale, the cardholder is asked to enter his / her confidential PIN directly onto the retailer’s terminal / PIN pad. The PIN, therefore, is the electronic equivalent of the cardholder’s signature. This considerably reduces the risk of fraud. CHIP and PIN cards which are lost or stolen cannot be used by fraudsters to make a purchase with a forged signature since the PIN, known only to the cardholder, is required to be able to pay at any point-of-sale (as in the case of a cash withdrawal from an ATM).

 

As the rolling out of CHIP and PIN cards gains momentum, the Malta Bankers’ Association has highlighted the need for holders of such cards to ensure that they:

 

  • Memorise their PIN,  as without entering this on the point-of-sale terminal, payment can no longer be effected, in Malta or abroad, at retail outlets whose terminals have already been upgraded to CHIP and PIN ( where the terminals have not yet been upgraded to CHIP and PIN, cardholders will still be asked to sign a paper chit).

     

  • Shield the keypad from view when entering their PIN on the point-of-sale terminal.

     

  • Never divulge their PIN to the retailer or to any other third party, or allow anyone else to enter the PIN onto the retailer’s terminal on their behalf.

     

  • Never quote their PIN in correspondence, over the telephone or on the internet.

     

CHIP and PIN cardholders should find the new procedure to be easy, faster and much more secure. In case of any difficulty, they should contact their card issuing bank for any guidance or assistance which they may require.