PINs now replace signatures on Australian card transactions

Australia's 800,000 card payment terminals will no longer accept signatures as a way of authorising cards from August 1, 2014. The move will start at the big retailers and the full transition is expected to take a couple of weeks to come into effect nationwide.

If you're already using your PIN for transactions, you're fine. But what do you do if you've forgotten your PIN, you want to change it or you're not even sure you have one?

How to set up your PIN

If you know your existing PIN but want to change it, the major banks will let you change it at their own ATMs. But here's how to set up your PIN on a card that you've previously only ever signed for (click the links for more information from each bank).

ANZ: Go to an ANZ branch or call 13 13 14 (personal banking customers), 1800 032 481 (business credit card customers) or 1800 801 485 (business Visa debit customers).

Commonwealth Bank: The bank has a page with all the details on how to set up or change your PIN, including on Netbank, the Commbank App, at a Commbank ATM, in a branch or by phone (13 22 21 for personal banking customers or 13 15 76 for business customers).

NAB: Customers can call the bank on 13 37 68 or visit an NAB branch.

St. George: Visit a St. George branch, or call to set up your PIN -- personal banking customers can call 13 33 30, while business customers should call 13 38 00.

Westpac: Whether you've forgotten your existing PIN or you've never used one, you can request a new PIN via online banking, by visiting a Westpac branch or calling 1300 651 089 (for personal banking customers) or 1300 650 107 (for business banking customers).

American Express: Amex has been rolling out chip-enabled cards that are set up with a PIN upon activation. According to Amex, "If you do not have a chip embedded into your...magnetic stripe card, you will NOT be impacted by the 1 August change, and can continue to sign for your in-store purchases. You will receive a chip enabled card by March 2015 and will be required to select a PIN during activation."

Why is Australia changing to PIN authorisation?

The shift is an initiative of PINwise, a collective made up of Australia's major banks and card providers, which is advising Australian card holders to "get ready today" so they're not left behind.

According to PINwise spokesperson Nicole Pedersen-McKinnon, the move to Chip and PIN technology has already been successful in countries such as the UK, Malaysia and Canada, and is now necessary in Australia to combat card fraud.

"It's become apparent that fewer and fewer merchants are checking signatures when a shopper makes a purchase, making many signatures relatively easy to copy or forge," said McKinnon. "As you'd expect, over time the technology used by fraudsters has developed.

"EMV (Europay, Mastercard, Visa) chip technology is the global standard for integrated circuit cards (also known as chip cards) for authentication of transactions for credit, debit, and some prepaid cards.

"The chip has embedded within it confidential cardholder data and supports dynamic authentication, whereas magnetic stripe cards do not," she added. "When undertaking a transaction, the PIN on the chip is encrypted by the terminal and usually transmitted to the card issuer (such as the bank) for authentication, thereby protecting cardholder data."

It will be some years before magnetic stripes disappear altogether, especially from cards that have overseas payment capabilities. ATMs and POS terminals need to be widely upgraded to accept the new chip cards, and McKinnon said USA is "the major market holding up this move".

Similarly, foreign visitors to Australia will still be able to sign for purchases as the chip and PIN requirement only applies to Australian cards.

The magnetic stripe will play a major role here -- it's encrypted with a two-digit country code, so if an Australian card is swiped, the card reader will recognise the Australian code and 'demand' a PIN. Foreign cards with a different code will still get through with a signature.

But while the shift to chip and PIN technology requires new cards and payment terminals, McKinnon said the change is worth it.

"The types of point of sale fraud that will be immediately addressed by chip and PIN are 'lost and stolen cards' and 'never received cards'," she said, adding that thieves won't be able to use your card if they steal it from the mailbox.

"We also expect a reduction in card skimming at restaurants and other hospitality locations, as cards will no longer be handed to the waiter and taken away to an out of sight location; rather a pay-at-table device will be brought to the cardholder and the card will never leave its owner's hands."

Updated July 30, 2014, at 12:44 p.m. AEST to include individual bank switchover details.