A proposed credit card payment system is set to save banks millions in fraud costs according to industry reports.

The new system plans to introduce a pin code to the sales procedure, in replacement of signing a receipt.

The ‘Chip and PIN’ scheme has already been trialled among 1,000 retailers, and generated positive results.

Experts have reported card fraud to be costing an annual £424 million, with the possibility of doubling in the next two years if nothing is done to solve the problem.

The new technology will cost banks and retailers an estimated £1.1 billion to implement.