Grannell said retailers should now finalise their own arrangements as “the train had left the station” on chip and pin.
By January next year, they will be liable for all losses incurred as a result of fraud on debit and credit card transactions that are made without the chip and pin verification process.
Grannell predicted 60% of transactions would be chip and pin verified by the end of 2004 and 90% by the end of 2005.
He said 100,000 retailer terminals had been made compliant with chip and pin, including all those operated by Safeway, Sainsbury and Tesco.
But there are still 750,000 terminals to be upgraded, at an estimated cost of around £200 each. Grannell said: “The business case for chip and pin will become compelling in the future as fraudsters will look for the weakest link: the retailers who do not use it.” The new verification system would help retailers streamline back office functions, reduce paperwork and save money, Grannell said.