Pin payments coming to Australian shops

Credit card holders across Australia will have the option of using their pin number instead of a signature to make purchases in many shops later this year.

The credit card industry - along with many of the major banks - is teaming up to roll out pin machines and many of the country's major retailers from June 4th.

Customers will not have to pay a fee for using the pin machines and they can still use their signatures to verify transactions on credit cards if they prefer to do so.

Previously, pin numbers were only necessary for ATM machines but they are seen by the credit card industry as a way to tackle the growing subject of credit card fraud.

In the UK, so-called chip and pin machines have been compulsory in shops and retailers since 2006 and, initially, credit card and debit card fraud reduced by 25 per cent in the first year.

Chris Harrison, chief executive of the Australian Payments Clearing Association, says there are both efficiency and security benefits to the new system.

"We think it is a sensible development and we're happy to see the industry's existing familiarity with pin technology in debit cards being used in this extended way."

The change is likely to mean faster transaction speeds and a reduction in the amount of paper used in stores across the country.

A full compulsory pin system - similar to that in the UK - is planned for Australia, but a date has not been set until consumer trials have been completed.

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