Payment technology: 10 years on from Chip and PIN


Over the past ten years, card payments have grown in popularity amongst consumers, and the stigma surrounding paying for lower-value purchases using a debit card has reduced due advancements in payment technology. Consumers are now carrying less cash than ever before, preferring to pay for both large and small purchases by card.

Tech companies have constantly developed innovative new ways to improve the way we pay for goods over the past ten years, and we’re taking a look at some of these significant developments in payment technology.

In 2006, months before the launch of Handepay Merchant Services, the deadline to switch to Chip and PIN technology was announced. New Chip and PIN cards would replace the previous ‘mag-stripe’ cards, which required the cardholder to authorise every transaction by providing their signature. Chip and PIN was introduced to speed up the payment process and improve security measures for consumers and businesses alike. As these cards required a PIN to authorise the payment, there would be less fraudulent activity on lost or stolen cards.

The launch of Chip and PIN resulted in a huge adjustment for both consumers and business owners. With 140 million new Chip and PIN  cards despatched to cardholders across the UK, 860,000 shops were required to upgrade their card terminals to accept the new type of cards, and 3 million staff working in shops were trained how to use the new technology.

Developers were soon attempting to make improvements to payment technology, by making the process even faster, while maintaining high levels of security. In 2007, contactless technology was introduced in the UK, with Barclays sending out their first contactless-enabled cards in 2008. This new technology gave consumers the ability to pay for small purchases quickly, by simply tapping their card against the screen of a card reader, without needing to enter a PIN number.

Security measures put in place to minimise any potential losses from contactless card theft or fraud meant that that every fifth contactless payment required PIN verification from the cardholder.

When initially launched, consumers were only able to spend up to a maximum of £10 per contactless transaction. Due to a surge in uptake of contactless payments the limit has since been increased, first to £20 and again to £30 in September 2015.

Tech companies have built on contactless technology to incorporate digital aspects into consumer payments, and are focused on improvements over the coming years. Mobile phone developers, in particular, are dedicated to combining current payment systems with their technology.

These services are described as ‘digital wallets’, allowing consumers to link their contactless cards to their mobile device. To ensure safety, each transaction made using a digital wallet uses a single-use security code to encrypt the transaction details, and card details are never stored on the device itself.

The launch of Apple Pay in July 2015 allowed consumers to pay for goods with their Apple iPhone or Apple Watch using contactless technology.

Take a look at how card payments have developed over the past decade, with customers using cards to make more payments than ever before

Financial disclaimer:

Terminal hire contracts are provided by Merchant Rentals Limited, who is authorised and regulated in the UK by the Financial Conduct Authority (FCA) for Consumer Hire under FRN 720500. Terminal hire can be for consumer hire and non-regulated hire contracts. Please check your contract carefully for details. Regulation of all consumer hire fall under the control of the FCA.

Handepay Ltd is authorised and regulated by the FCA for Consumer Credit under FRN 673564. Handepay is a credit broker for consumer hire not a lender.

Handepay acts as an introducer of card acquiring services on behalf of EVO Payments UK, the card acquiring service provider. EVO Payments UK is the trading name of EVO Payments UK Ltd, a payment institution that is authorised and regulated by the Financial Conduct Authority (FRN number 959332).

Existing Cards Businesses- The one-month rolling terminal hire contract from Merchant Rentals is only available to businesses that are switching from their current acquirer to EVO Payments UK arranged through Handepay.

New to Cards Businesses- The 12-month terminal hire contract from Merchant Rentals is only available to businesses that are new to card payments and wish to receive acquiring services from EVO Payments UK, arranged through Handepay.

The Next Day Banking Settlement service provided by EVO Payments UK incurs an additional fee of £4 a month on top of your acquiring service charges and fees. Provided your card machine performs a reconciliation before 12am (midnight), you’ll receive settlement of funds the next banking day.

Editorial disclaimer:

The information we provide does not constitute financial advice and might not apply to your business. Always carry out research into your business’ needs when choosing a new merchant services provider.

Sometimes, we link to other third-party websites to provide you with additional information. At the time of publication, we consider the information accurate, however, we do not have control over their content and are not responsible if any information on these websites change.

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