HSBC Merchant Services – Card present fraud

What to do if the card fails to swipe or the chip fails to read

If the terminal identifies that the card is chip and PIN enabled:

request the cardholder to input their PIN
if the cardholder cannot remember, or does not know their PIN, do not continue with this card. From 14 February 2006 cardholders must use their PIN to pay with a chip and PIN card. Should you wish to proceed with the transaction, you must obtain an alternative method of payment
if the chip card fails to read – process the transaction as a magnetic stripe sale. The terminal will prompt you as to the required procedure. You must conduct the usual security checks.

If you suspect fraud, call for authorisation. The initiation of a "Code 10" call alerts HSBC Merchant Services that you are dealing with suspicious circumstances. Relevant security checks can be undertaken and questions asked of the cardholder to help confirm their identity.

HSBC Merchant Services will not mind if it turns out to be false alarm. It is better to be cautious! If you retain a card and stop a fraud you qualify for at least a £50 reward. Return the card as instructed by your card processor or your own operating regulations. Please do not put yourself or your colleagues in danger when trying to retain a card.

More about chip and PIN

On 1 January 2005, liability moved to the non-chip and PIN compliant party.

Cross-border non-chip cards will still be in existence. Europe is expected to be chip and PIN compliant by the end of 2010. Other countries that have yet to embrace this technology are expected to follow in due course. Magnetic stripe sales will, therefore, reduce over the next two or three years. However, in the interim period, they will continue to issue cards with the traditional magnetic stripe. Merchants who are presented with these cards should be aware that though the majority may be valid, retailers must carry out the necessary additional checks to ensure they are genuine cards.

For more information about chip and PIN, visit www.chipandpin.co.uk.

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