Barclaycard claims a PIN trial success

Single-use authorisation code has wide market potential

Barclaycard has completed a six-month trial of a device that could help online retailers cut fraud by providing a form of chip-and-PIN.

The credit card provider is still analysing the results of the pilot scheme, but says early reports from customers have shown the device is easy to use and increases cardholder confidence when buying goods online.

'The trial was intended to look at cardholder acceptance of such a device: would they use it? Is it easy to use? Would people carry it with them or need more than one device for both work and home?' said a spokeswoman for Barclaycard.

'It was not a trial to see if the technology works or not. We've already established that.'

The bank issued 1,500 of its cardholders with the device for the trial, primarily involving customers who frequently shop online and hold a chip-based MasterCard credit or debit card (Computing, 27 November 2003).

To authenticate transactions with participating retailers, cardholders insert their cards into the device, a credit-card sized reader, and then enter their PIN to generate a unique eight-digit number that is verified by the card-issuing bank.

Once a code has been used, it cannot be re-used for future transactions.

The system could also act as a way for firms to validate transactions made though call centres or even email, helping cut fraud.

According to the Association for Payment Clearing Services (Apacs), card-not-present fraud in the UK rose nearly a quarter to £150.8m last year, making it the biggest single category of fraud.

Barclaycard is now deciding whether or not its solution can be rolled out across the market, which would require widespread industry collaboration.

'We need to engage with retailers and banks to find out how to take this forward,' said the spokeswoman. 'For this to work, we need retailers to put this system in place on their sites. It has to be a complete circle.'

Barclaycard is also reviewing other issues, such as whether or not to charge for such a device and how it might be effectively issued to users.