Finance glossary
Chip and PIN
In simple terms
Chip and PIN is the system where you put your card in the reader and type your four-digit PIN to prove the payment is really you.
On this page
What does chip and PIN mean?
Chip and PIN is a card-payment method where the chip in your card is read and you enter your personal identification number (PIN) to authorise the transaction. It replaced signature-based payments in the UK to cut fraud.
The PIN proves it is genuinely you, so the payment is “verified”.
How chip and PIN works
You insert the card, the terminal reads the chip, and you type your PIN. The bank checks the PIN and either approves or declines the payment. For smaller amounts, contactless often skips the PIN, though a PIN is sometimes requested for security.
Getting your PIN wrong too many times can temporarily block the card.
How could this affect me?
Chip and PIN is more secure than signatures, but it only protects you if you keep your PIN secret. Never share it or write it down with the card.
If someone uses your card without authorisation, you are generally protected — but revealing your PIN can affect how a dispute is treated.
Things to watch out for
- Never share your PIN or write it down with your card.
- Shield the keypad when entering your PIN.
- Too many wrong attempts can block the card.
General information, not personal advice
Consumer Credit is an independent information service. We do not provide regulated financial advice or sell financial products. For advice on your own situation, speak to an appropriately authorised firm or a free service such as MoneyHelper. About Consumer Credit.
Sources
We checked this page against these official and authoritative sources.
- UK Finance, Card payments and security (opens in a new tab). Accessed 22 Aug 2026.