Retail therapy to cure IT

UK law and the banking community are looking to chip and Pin technology to combat spiralling credit card fraud.

What will be the next area of big growth in IT? In retail, all the signs are there. If you look at point of sale (POS) systems, IT is driven by legislation and international events.

The last big drivers were the end of the millennium, e-commerce and the introduction of the euro, resulting in huge booms in retail IT expenditure. Now UK legislation and the banking community are turning to chip and Pin technology to combat spiralling credit card fraud.

By the end of 2004, the aim is for all POS systems to be chip-and-Pin-capable. Smart cards will be accepted at the checkout, where customers will enter their Pin into a keypad.

This is more secure than using a signature and answers the two key questions in preventing fraud: that the card is genuine and the person using it is its true owner.

Upgrading to accommodate this while at the same time replacing ageing hardware will fuel the next big IT spending spree. Retailers will want to avoid the added cost of disruption to customers in upgrading POS.

They will therefore review all their POS IT needs at the same time to ensure that they are implemented together and disruption is minimised.

This also enables them to take advantage of new technologies, such as two-colour thermal printing to draw attention to customer relationship initiatives and promotional messages, or printers that automatically trigger vouchers and coupons on the end of POS receipts.

If we take the example of organisations such as restaurants, chip and Pin will address a key payment security issue and relieve the problem of periods of high customer demand, which put a strain on traditional fixed checkouts.

One solution is for staff to use a combined mobile ordering system and POS: a computer device and a portable printer to print out receipts. This is linked wirelessly to the POS using Wi-Fi technology.

Now add chip and Pin into the equation and the printer can have a built-in chip card reader, with the Pin entered into the hand-held keypad.

This is much more secure as the card is not taken away - a key fraud incidence point - and the whole transaction can be completed at the table.

Stephen Berry is vice president of sales and director of Axiohm.