Cash cut as new cards hit town
15 April 2004
The introduction of the new chip and PIN credit and debit cards is predicted to see a significant decrease in those paying with cash or cheques, according to research carried out by MasterCard.
The new technology will see people pay for goods by typing in a PIN number to a consol rather than sign their name to authorise a transaction.
Around 41 per cent said they would opt for the convenience of plastic, and 42 per cent say they will carry less coins and cash on them.
The main reason respondents gave for making more purchases by plastic rather than cash or cheques was that it will be made safer (55 per cent) and quicker (52 per cent) once chip and PIN is in place.
Additionally, the technology will enable stores to provide secure self-service checkouts - a key factor for the increase in cards users.
"The research suggests that the roll out of chip and PIN in the UK will spark a huge step change in the way people prefer to pay," said Paul Lucraft, the general manager of MasterCard for business services in Northern Europe.
"It seems that peoples' wallets and purses will soon be a lot slimmer . . . They will opt instead for the increased convenience and security offered by plastic once signatures are replaced by PIN numbers."
The findings also suggest that due to the security level increase, around three million people will apply for their first credit card once chip and PIN cards are in place.
The UK chip and PIN programme is part of an international initiative to tackle plastic card fraud. A similar domestic PIN based system for debit cards in France has seen an 80 per cent reduction in fraud since its introduction ten years ago.