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Countdown begins for switch from debit/credit card signature to PIN in Australia

Hamish Barwick | Aug. 1, 2014
Signing for debit/credit card purchases to be phased out between 1 August and 18 October.

credit card

Banks are reminding consumers that they will no longer be able to sign when they make purchases on their debit and credit cards in Australia from 1 August 2014. Instead, people will need to use a PIN -- part of a move to decrease card fraud in Australia.

The move to PIN will be rolled out gradually between 1 August and 18 October 2014 to give time for people to get used to the change. Approximately 800,000 point of sale (POS) terminals in Australia need a software update as the country phases out signature-based credit and debit card payments.

RMIT University associate professor Asha Rao, who specialises in information security, told Computerworld Australia that PINs are safer than signatures.

"PINs use EFTPOS terminals which have a PIN pad. This [pad] is tamper resistant and it will shut down if someone tries to break into it," she said.

Rao added that most checkout staff "almost never" look at people's signatures to see if they match.

"The other thing with signatures is that they are written on the back of the card whereas a PIN is not."

A PIN may help make in-store purchases more secure, but it doesn't really address online purchases.

"On the other hand, if you are using your card to make purchases online your PIN does not help at all because the retailer does not ask you for a PIN."

In addition, services such as PayPass and PayWave where people tap or swipe their card don't require a PIN. However, Rao said the transaction limit on these services is capped at $100.

"My advice to consumers is to always keep an eye on your transactions and report any anomalies to your bank as soon as possible."

According to Commonwealth Bank of Australia's merchant solutions managing director, Andrew Cheesman, the move to PIN is a "positive step forward" for retailers and consumers.

"The more businesses prepare for the change, the sooner they'll benefit from faster payments and a reduction in the number of dispute and fraudulent transactions," he said in a statement.

CBA has teamed up with hospitality industry body Restaurant & Catering Australia to provide support to bar, nightclub and restaurant operators.

This is because the transition to PIN has the potential to reduce the volume of tips. According to Cheesman, this accounts for a "considerable portion" of earnings for some clubs and restaurants.

Restaurant & Catering Australia CEO John Hart said he partnered with CBA because the bank offers payment terminals that allow patrons to tip restaurant staff, split bills and process credit cards at the table.

In March 2014, MasterCard Australia country manager Andrew Cartwright said the United Kingdom moved to a PIN-only system in February 2006.

 

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