Chip and PIN: A decade later

Yesterday, as lovers around the world celebrated Valentine’s Day, there was a very important birthday slipping by almost unnoticed.

14th February 2016 marked the day Chip and PIN turned 10 years-old. But instead of offering up a cake and candles to the payment method that made strides in combatting fraud (a whopping £81.9m reduction in ten years is not to be sniffed at), a large proportion of the fintech world focused on Chip’s younger sibling, Contactless.

According to industry body UK Cards Association, around three quarters of UK businesses now accept Chip and PIN. Although Barclaycard have released figures showing that at the tender age of ten, this payment method has already been considered past its prime, with contactless payments seeing spending increase by a huge 164% compared to last year.

A decade on from Chip and PIN, many new payment methods have been made available – from the typical move to mobile payments, to the weird and wonderful biometric payment methods such as FingoPay where customers can securely pay using the veins in their fingertips. However, Richard Koch of UK Cards Association cites Chip and PIN as the “biggest change to consumer behaviour since decimalisation”.

Not only has it clearly been successful in combatting fraud and tackling counterfeit cards, but it is Chip and PIN that has allowed technical innovation, and through this we are able to see the rise of contactless and mobile payments. While it has been ten years since Chip and PIN was seen as revolutionary, it can’t be denied that this was an intrinsic part of the innovation in fintech.

Despite the onslaught of innovative payment methods, card remains king with £4 in every £5 spent at UK retailers using plastic, and while there is a £30 spending limit on contactless payments, Chip and PIN still has a solid home in point-of-sale.

The payments industry is one of the fastest growing sectors with a constant churn of fresh ideas and entrepreneurial spirit, making it easy to forget the “old” days when consumers had to swipe and sign, but while this is a dawn of a new era of exciting payments, it’s not the end. Chip and PIN should start stocking up on the anti-wrinkle creams, but it shouldn’t be setting out funeral plans just yet.