• silicon.com
• Management
• CIO Insights

By Gemma Simpson, 18 December 2006 12:25

NEWS

Chip and PIN. RFID. Contactless payments. Wi-fi. The retail and leisure space was rife with new technologies in 2006 - not to mention a supermarket becoming Microsoft's new software rival. Gemma Simpson runs down the highlights of the year for one of the tech-savviest sectors.

Retailers started off the year thinking about Chip and PIN. Those who hadn't already switched to the new payment technology were forced to play catch-up as the 14 February deadline approached.

Chip and PIN has its share of critics but figures show 95 per cent of retailers are now using the technology and fraud has fallen since it was introduced.

One notable hiccup occurred in May, when petrol company Shell was hit by a chip and PIN scam which resulted in the theft of more than £1m from customer accounts. Payments body Apacs claimed the glitch was an inside job.

And while chip and PIN has helped reduce card fraud on the high street, criminals have turned their attention to the internet, phone and mail order transactions with a 21 per cent rise in card-not-present fraud since 2005.

Not long after chip and PIN's launch, its successor was already being talked about - using biometrics such as iris scans and fingerprints for making payments. Trials of fingerprint payments kicked off in Oxford's Co-op stores in March and the supermarket subsequently doubled the number of stores with the fingerprint payment tech in July.

Things got even more Orwellian for retailers in 2006 with RFID appearing in some pretty unusual places. The wireless technology has been used to tag everything from pub tables and children to blood supplies and army tanks.

One of the more controversial applications is the soon-to-be mandatory use of RFID in passports with the US racing ahead with the new tech and the UK not far behind. As well as the obvious privacy concerns, experts have questioned how secure the passports are - and some claim to have cracked and cloned them already.

2006 was also the year contactless payments took centre stage. Allowing commuters to buy items with their Oyster cards, as they can in Hong Kong with the Octopus card, hit a snag but now live trials are planned with a view to rolling out the 'wave and pay' cards across the capital from 2007.

Tesco made headlines this year as the somewhat unlikely new rival to Microsoft. The supermarket launched its own-brand consumer office and antivirus PC software for less than £20 - a move which puts it into direct competition with the Redmond giant.

As the Tesco software hit the shelves last month, punters weighed in on whether the supermarket has a chance of being a software success - and a poll of silicon.com readers revealed nearly half trust Tesco to produce quality software.

Allowing customers to stay connected while on the move became a big priority for retail and leisure organisations in 2006.

Wi-fi became more common in London pubs - so much so that silicon.com created a guide to help thirsty road warriors get online.

Train travellers can now stay connected as rail operator GNER completed its £3.2m fit-out of all its trains with wi-fi broadband connectivity ahead of schedule this year.

Hotels, however, made a poor showing with London named as the most expensive city in Europe for wi-fi internet access in business-traveller class hotels.

It wasn't the best of years for online gambling sites, to say the least, as new US legislation made it unlawful for credit card companies to collect payments for transactions with US online gambling sites.

Online gambling was consequently on a losing streak for the rest of the year, as gaming sites had to suspend US business. Some were even demoted from FTSE indices.

Looking to the holiday season, online retailers should end the year on a high note with predictions it will be a record-breaking Christmas in terms of presents bought online and expectations that the internet will beat the high street for Christmas shopping.

2007 should bring plenty of activity in the retail and leisure space with more high-tech payments rollouts and internet connectivity available. Also raising eyebrows in the New Year will be the pay-per-mile road charging scheme and predictions from BT's futurologist that RFID will bring about an 'internet of things' in which tiny computers are embedded in everyday items.