A High Street survey of UK retailers conducted in the first days of 2005 reveals less than half are ready for using chip-and-PIN cards.

Only 49 per cent of 498 retailers across 10 towns surveyed at random could accept the anti-fraud technology by the 1 January target.

And only 68 of 159 retailers visited in Guildford were ready. In Oxford, just 47 per cent of retailers were prepared.

Mark McMurtrie of supplier Retail Logic, who carried out the research, said: 'What was disappointing was the number of familiar High Street names that are clearly still some months away from completing their rollouts.'

Figures from the Chip-and-PIN Programme Management Organisation (PMO) suggest two out of every three businesses had embarked on the required upgrade by November last year. Some 540,000 tills were ready out of a national total of 860,000.

But a spokesman for the Association for Payment Clearing Services, which represents the payment industry, says these numbers may not yet have translated to in-store upgrades for every point-of-sale terminal.

'Eight out 10 retailers have begun to look at chip-and-PIN, but that is unlikely to translate to the number of tills ready for the public,' he said.

Although there is no legal requirement for businesses to install chip-and-PIN technology, the financial industry imposed a 1 January 2005 target for passing liability for fraudulent chip-and-PIN card transactions onto businesses.

The initiative could potentially save banks £5m per year paid out in covering cardholders' fraud liability by passing the cost onto businesses without the new security measures in place.

'If retailers haven't invested in the technology, it will cost them,' said Andrew Thomas, Retail Logic's head of media. 'And, [the readiness of many major] retailers will enable fraudsters to go elsewhere, to smaller stores or online.'

Mike Godliman, retail analyst from Pragma Consulting says that for 'a short limited time, there will be impact online and for small retailers'.

But he adds most were likely to upgrade before long because 'the short-term gain of deferring the investment was outweighed by the long-term risk' of rising fraud costs.

Percentage of High Street retailers visited that were chip-and-PIN enabled by 1 January 2005:

• Farnham - 62%
  
  
  

• Stratford-upon-Avon - 57%
  
  
  

• Kingston upon Thames - 54%
  
  
  

• Brighton - 50%
  
  
  

• Southampton - 49%
  
  
  

• Reading - 47%
  
  
  

• Basingstoke - 44%
  
  
  

• Truro - 44%
  
  
  

• Guildford - 43%
  
  
  

• Oxford -38%