PIN is in as banks ditch signatures
SENIORS, and the hospitality and car rental industries are among those fearful of changes to credit card transactions, which come in today.
Signatures on receipts for credit and debit card purchases made in person will be abolished from August 1, and a PIN will be required instead.
The Industry Security Initiative, a collective of Aussie banks and card schemes, ordered the phase-out for security reasons.
They say there is a one in 10,000 chance of guessing a personal identification number as opposed to signatures which can be easily forged.
"I don't agree with that logic," president of the Caloundra branch of the Australian Pensioners and Superannuants League, Frank Gower, said.
"Any removal of security for seniors or anyone with a credit card is a backward step.
"For many seniors it's another number they have to remember. These seniors have grown up with signing a paper.
"You own your own signature, whereas a number is just a number."
The hospitality industry believes the move could spell the end of tipping.
"Currently customers can insert a tip at the bottom of the credit card transaction when they sign for the bill at their table, but with typical PIN transactions the amount is locked in at the front desk when staff key in the details," said Andrew Rothwell, co-founder of Tyro Payments, which makes a mobile EFTPOS terminal.
"That means the only way customers can offer a tip is to dig into their own pockets and provide a cash tip on top.
"Tipping is likely to be the casualty with tips expected to fall by double digits, similar to the UK experience."
Redspot Sixt Car Rental Sunshine Coast Airport branch manager Danny Moloney (pictured) said he had been doing his best to alert customers.
"All of them are aware of it, but a lot of them haven't done anything about it," he said.
"A lot say they have the PIN at home, but it's a matter of finding it. That will be okay for the younger people who are computer savvy, but I think the elderly will have to get around the idea.
"If you've got one card, it's fine, but if you've got three or four it might be a problem remembering all those PINs.
"It could cause some confusion at the counter."
►What about online shopping or tap-and-go payments?
The government's MoneySmart website said the changes would not affect online shopping, phone purchases or contact transactions such as payWave and PayPass.
It said this change would affect only transactions where people were physically present at the point of sale and if the card had an embedded smart chip. Chip-less cards with a magnetic strip would still require signatures.
Mr Moloney said he believed there would be a grace period during the transition.
"I don't think if people rock up on Friday the first of August and they've got no PIN that they'll reject it, but we'll have to put it through and see," he said.
"I suppose it's (for) security, but it also must be a cost-saving thing."
►You can always fall back on EFTPOS
Meanwhile, Bruce Mansfield, CEO of EFTPOS, the payment company owned by the banks, has opportunistically urged people not to panic about the introduction of PINs.
"While there may be some issues with PINs on credit cards and scheme debit on Friday, most consumers are very familiar with their EFTPOS PIN, which is the same as their ATM PIN.
"If retailers come up against any problems, they should just ask if the customer has an EFTPOS card, or any other card that supports EFTPOS cheque or savings transactions. The chances are they will remember their PIN and be able to make the transaction.
"We are looking at ways to encourage tipping at restaurants and cafes, and some new terminals now include a tipping option."
More information for both businesses and consumers is at www.pinwise.com.au
- Australia's first credit card, Bankcard, launched: 1974
- EFTPOS launched in Australia: 1988
- Commonwealth Bank makes first contactless credit card payment: 2006
Reserve Bank of Australia data show 15.410 million credit card accounts in July 2013
- Current average debt per credit card: $4356