New technology replacing the use of signatures at counters with a keypad and a perosnal identification number entered by the card holder.

Chip and PIN is a programme aimed at reducing fraud for those transactions where the cardholder and card are present at the time of the transaction. The Chip (silver or gold coloured square on the front left side of the card) is embedded into a card to provide highly secure memory and processing capabilities. In addition to holding the same personal data as the magnetic stripe, the chip provides additional security features to safeguard against counterfeiting. The PIN is a four-digit number that the cardholder will enter into the PIN pad instead of signing a card receipt. From January 2005, liability for counterfeit card transactions and lost and stolen card fraud, will pass to the party that is not chip & PIN compliant. Where all parties are compliant, then counterfeit transactions should reduce significantly and there will be no recourse by the cardholder saying they did not authorise the transaction.

Face-to-face credit and debit card transactions at the point of sale which are authorised by the customer keying in a Personal Identification Number (PIN) rather than by signing a receipt.