French consumers have been using the technology for 10 years, and it has now become part of everyday life there. But while the technology has been around for more than a decade, it is the impact that it has had on reducing the levels of credit card fraud in France which has finally galvanised retailers across the Channel into action.
The new system will do away with the need for shoppers to sign their name on a till receipt every time they use their card to buy goods - a system which is open to widespread abuse with card details frequently being 'skimmed' or 'cloned' (copied) and signatures forged.
Instead, consumers will simply type their four-digit PIN into a special terminal - in the same way as they would do to withdraw cash from an ATM - making the entire transaction both quicker and far more secure.
2004 is the year for chip and PIN technology in the UK. The aim is for the system to be available in half the major UK retail operators - including all the leading supermarket chains - by the start of next year, and in 440,000 of the 550,000 small and medium-sized retailers by the end of the current year.
After a hugely three-month successful trial in the town of Northampton last year - over 167,000 transactions were carried out during the period - the chip and PIN system is being rapidly rolled out across the UK this year. One food retailer, Safeway, has already introduced it into all its stores, and more than 100,000 transactions are carried out in its 480 stores using the new system each week.
The latest chip and PIN 'barometer', released this week, shows that millions of people have now received new chip and PIN cards - clearly an important element of the rapid rollout of the system - and that some 100,000 businesses which accept credit or debit cards have already switched over to chip and PIN.
New chip and PIN cards will be issued and tills switched over according to the individual plans of the banks, building societies, merchants and retailers. A nationwide TV advertising campaign will begin in March, while card issuers and retailers are also expected to carry out their own communication programmes.
The UK chip and PIN programme is part of an international initiative to tackle counterfeit and lost and stolen plastic card fraud. The UK timescales are in line with those for Europe - with a rough deadline of the end of 2005. Even France, which has already seen an 80 per cent reduction in card fraud levels since introducing its domestic scheme ten years ago, will change to the EMV system (named after the copy which created the chip and PIN technology being used), the first to be rolled out on a global scale.
According to the Chip and PIN website, card-related fraud losses between June 2002 and June 2003 were more than £411 million, and it is perhaps the escalating scale of the problem - as much as the good results from across the Channel - which have prompted the UK rollout.
So why, if France has had its own (albeit domestic) system for 10 years, has it taken so long? One suggestion is that the retailers and banks (in the form of the British Retail Consortium and APAX, their respective trade bodies) have been arguing over who will meet the cost of the £1.1 billion rollout of the system - despite the fact that a more rapid introduction of the scheme could have helped cut card fraud much earlier.
However, the more likely reason for the delay is the sheer scale of the project - the EMV global standard system is the first which is just that - global - and co-ordinating a rollout on such a scale is clearly a lengthy task. Add to that the fact that other fraud protection schemes (such as cards with photographs on them) have also been trialled, and the reason for the delay becomes much clearer.