The impending deadline has finally arrived for Australians to make the switch from signature to PIN when authorising a credit or debit card payment.
According to PINwise, a campaign by the Australian payments card industry, one fifth of cardholders were still signing for purchases just last week, despite the impending abolition of signatures altogether.
From today, PINs will become the main way for customers to complete a credit or debit card payment.
The move, which sees the complete phasing out of signatures on card payments, has been embraced by Australia’s major banks.
All transactions made in Australia using a chip card issued by Visa, MasterCard, American Express or Diners Club will be subject to the new authorisation system.
The shift to PIN-only technology will see all of Australia’s 800,000 payment terminals gradually undergo software upgrades, which means signature payments will soon be denied at every cash register around the country.
PINwise spokesperson Nicole Pedersen-McKinnon warns that from today, customers could be in for a rude shock, because payment terminals in certain shops will already have transitioned to PIN-only transactions.
“Without a valid form of authorisation, some may find themselves unable to pay for goods including petrol and groceries,” Pedersen-McKinnon said.
Purchases under $100 are however exempt from PIN payments, with customers still able to use ‘tap and go’ contactless technology to pay for their goods.
Those using a credit card to pay over for goods over the phone or online will also remain unaffected by the new rules.
The Industry Security Initiative (ISI), which pushed for the change, is confident the new system will increase the safety of card payments in Australia.
WHAT YOU NEED TO KNOW:
- If you use a PIN to access money from an ATM, you can use that same PIN for card transactions.
- Transactions under $100 with ‘tap and go’ technology don’t require a PIN
- You won't need a PIN for most purchases at unattended terminals like vending machines, parking meters and kiosks.
- Customers with cards from outside of Australia, such as tourists, will still be able to sign for purchases.
- People with special needs, will be granted a credit card which they can use a signature with.
- If you don't have a PIN, contact your bank directly. Most banks allow you to change your PIN by signing in to your online banking service.
- Those without a chip-embedded card can continue to sign for purchases until they receive a new card.
According to the ISI, entering a PIN is far safer than signing for a purchase, with only a one in 10,000 chance of someone correctly guessing your combination.
The easiest way to change your PIN is to check your bank’s website. Most of the banks have simple instructions for you to create a PIN by logging in to your online banking service.
Small businesses worried they will lose out
The phasing out of card signatures has some businesses worried they will lose out on tips as a result.
Restaurant & Catering Australia CEO John Hart says the new PIN requirement will change the way hospitality businesses engage with customers when it comes time to pay.
With the signature option, customers are able to write a specific tip on the merchant receipt for staff to then process later.
But the new authorisation system means the tip must be entered into the machine before the customer types their PIN.
“There’s a strong need to split bills, add tips and process credit cards at the table – all critical components of a dining experience that do not generally occur in a retail situation,” Hart said.
“It’s not as simple as tap-and-go - we need to think about the customer experience in a dining situation.”
Andrew Rothwell, co-founder of EFTPOS provider Tyro, warns Australia’s 37,700 restaurants, cafes and pubs could be in dire straits unless they adopt new technology.
He says mobile EFTPOS machines are an obvious solution to the new PIN system.
“[It allows] patrons to use the EFTPOS terminal at the table at their own pace to split the bill, tip and pay using their PIN,” Rothwell said.