Chip And PIN’s Impact On UK Card Spend And Fraud — 10 Years Later

While it’s too early to tell the impact of the U.S. EMV Chip and PIN migration, in the U.K., the 10-year anniversary report seems to be paying off for card spending.

According to a new report from the U.K. Cards Association, nearly four in every five pounds at British retailers come from debit and credit cards. The migration in the U.K. began on Feb. 14, 2006, and is regarded as the largest change to the U.K. payments market in decades.

To compare a 10-year difference, the card spending at U.K. retailers made with cards in 2006 was 55 percent. The December 2015 figures show that number has shifted to 78.5 percent, a 23.5 percent increase.

“Chip and PIN was introduced a decade ago to combat the rising levels of counterfeit and stolen card fraud in the U.K. It was the biggest change to consumer behavior since decimalization and it has been hugely successful in tackling counterfeit cards and reducing the threat of fraudsters using lost and stolen cards on the high street,” said Richard Koch, Head of Policy at the U.K. Cards Association.

“The introduction of Chip and PIN was a break with an 18th Century system which relied on signing pieces of paper to authorize a payment. Chip and PIN was deliberately designed so it could deliver significant technical innovation and these successes have included contactless and mobile payments, which use the same robust security features,” he continued. “Chip and PIN was world-leading in 2006 and is the envy of many industries. It has proven both a huge success and a great foundation for the future.”

Some highlights included in the report are:

  • Since introduced, there has been a reduction in fraud on counterfeit card and in high street fraud, with annual counterfeit card fraud losses alone down £81.9 million (about $118.2 million) between 2004 and 2014.
  • The system on which Chip and PIN was built was designed to be forward-looking, so it could enable innovation.
  • Among the Chip and PIN system’s successes are contactless cards, which are now used for a tenth of card transactions. It has also enabled card payments to be processed by mobile retailers and in unattended environments.
  • Forecasts suggest the amount spent on debit and credit cards could reach £901 billion (about $1.3 trillion) in 2024.
  • Chip and PIN also provided more flexibility for retailers, who no longer had to serve customers at a fixed till point and could experiment with mobile points of sale, such as tablets.



The pressure on banks to modernize their payments capabilities to support initiatives such as ISO 20022 and instant/real time payments has been exacerbated by the emergence of COVID-19 and the compelling need to quickly scale operations due to the rapid growth of contactless payments, and subsequent increase in digitization. Given this new normal, the need for agility and optimization across the payments processing value chain is imperative.