One million consumers have been warned they risk being ‘‘stranded at the checkout’’ when signatures for debit and credit cards are replaced by personal identification numbers from Friday.
PINs will become the main form of authorisation for cardholders as banks and card companies move to increase security and crack down on fraud. According to the Australian Payments Clearing Association, card fraud cost local banks $262 million between 2010 and 2012.
Nicole Pedersen-McKinnon, consumer spokeswoman for the payment industry’s PINwise campaign, said 80 per cent of cardholders used PINs but the rest were habitually signing for purchases as the August 1 deadline approached.
‘‘There are 1 million consumers who are far from ready for this move, so either don't have PINs or are not yet using their PINs,’’ she said. ‘‘I'm really worried ... that they're going to get stranded at the checkout.’’
She urged all cardholders without a PIN to contact their issuer. From Friday 800,000 merchant payment terminals nationwide will undergo a software update, rendering the signature obsolete.
Banks will issue signature-preferred cards for people who, for mental or physical reasons, will struggle to remember a PIN or use the terminal keypad. The cards had a different built-in verification code which allowed customers to sign rather than provide a PIN, a Westpac Group spokesman said.
But advocates for the elderly and disabled still have concerns about the new system.
‘‘The purpose of this is better security but for some people it will have the reverse effect,’’ Council on the Ageing Australia's chief executive, Ian Yates, said.
The council has had reports of bank staff advising elderly people with memory problems to carry a written record of their PIN.
‘‘I’m sure that’s not the official bank position ... but that’s what some people will do,’’ Mr Yates said. ‘‘The security implications are worrying.’’
The president of Blind Citizens Australia, Greg Madson, said many older members had never navigated a terminal keypad. ‘‘We will be advocating for some sort of uniformity across the design of these [terminals] so that people who are vision impaired ... [do] not have to struggle around the keyboard,’’ he said.
The executive director of the Australian Retailers Association, Russell Zimmerman, said retailers were prepared for the switch and the majority welcomed it.
‘‘It's going to be far more secure,’’ said Mr Zimmerman, who knows of one man who regularly signed for credit card purchases as ‘Mickey Mouse’. ‘‘Retailers just do not look at these signatures.’’
