High Street banks pin down fraud

HIGH Street banks expect to save a thumping £260m a year in fraud costs with a new credit card payment system due to start at the end of this year. This is equivalent to £6.19 for each of the UK's 42m credit and debit card holders.

But the big banks say they will not cut their much-criticised charges because they will have to share a £1.1bn bill with retailers to pay for the new technology.

Under the scheme, shoppers will key in a personal four-digit pin code into new processing machines instead of signing a receipt when they pay.

The system, called 'Chip and PIN', was tested among 1,000 retailers earlier this year. Customers said they 'loved' it. Card fraud cost banks £424m last year, which experts reckon will rocket to more than £800m by 2005 unless they act fast.