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Beginning on 1 November 2014, retailers that accept credit card payments will no longer be able to receive bank authorisation for the purchase of anything above $100 unless the customer supplies a PIN (transition period will start on 1 August 2014). The only other exception, a quite major one, is that telephone and online sales will continue as before.

This should come as no surprise to anyone who works in the retail industry, as this move was first made available as an option back in 2008. Those who have tested it give it high marks for being faster and safer.

Beginning on Friday, 1 August, the process will begin in earnest. The three month transition period is mainly for the benefit of customers. Retailers will rely on employees, signage and other methods to help educate customers. Cashiers will no doubt encounter some customers who have remained oblivious to the switch. They will have to offer to set the items purchased by the customer aside and advise that customer to go to their bank to get a PIN issued.

That, hopefully, will be an extremely isolated occurrence, since it appears that 80 percent of Australian credit card holders already have a bank issued PIN, so it would seem that the more frequent encounter will be the customer who has the PIN, but does not know that PIN.

Identity theft and credit card fraud is a costly proposition, running into billions of dollars per year. The new security measure in intended to reduce the amount lost to these causes, or at least to make it much harder on those who engage in criminal behaviour.

Most of the payment terminals in Australia are leased from banks and will be automatically have firmware upgrades performed the night before the switch. Big retailers that own their POS terminals should have been working with the appropriate banks for some time in preparation for the changeover.

Some bugs and potential snafus have been anticipated and it is probable that there might be others that will be revealed once the switch deadline has passed.