Industry hesitant on chip and PIN uptake

Hotels, restaurants and bars are dragging their feet when it comes to installing chip-and-PIN technology because low levels of fraud have not triggered a rush for the new technology.

Even though the industry is now liable for fraud if chip-and-PIN systems are not installed, many companies are waiting to put in new billing systems and chip-and-PIN terminals at the same time. A Savoy spokeswoman said: "Credit card fraud is not a huge issue for us. We're looking into the systems for the future, but there's currently no urgency as far as countering fraud is concerned."

Richard Shepherd, owner of Langan's Brasserie in London, whose system goes live next week, said he had waited until now as it had to be integrated with the new billing system. "We haven't been culpable for any fraudulent use. We've been assessing systems for a few months to ensure we do it right - not willy-nilly. We're putting in a whole new billing system and wanted the two systems to be fully integrated."

However, one hotel group has found chip-and-PIN technology successful in reducing fraud. In Manchester, the Lowry hotel's general manager, John Philipson, claimed it had significantly reduced the fraud his hotel was liable for.

"Pre-chip and PIN we were liable for around £1,000-£2,500 a month in fraudulent charges but the new system is fantastic," he said. "For the last two months it has been nil."

Connie Penn, chairwoman of the Hospitality Users Discussion Forum, said the technology was just beginning to meet the industry's needs. But she warned hospitality businesses to stop offering cash-back without the chip-and-PIN technology, as this was open to fraud and would leave businesses footing the bill.

Source: Caterer & Hotelkeeper magazine, 21 April 2005