New measures to counter credit and debit card fraud have been unveiled by the UK's banking industry.

The proposed change means people will key in a PIN number when they use their card instead of signing a receipt.

Last year, card fraud was estimated to have cost the industry about �400m and it is hoped the new scheme will halve mis-use within three years.

The total cost of carrying out the new measures is estimated at �1.1bn, spread over the next two to three years.

Pilot schemes

The Association for Payment Clearing Services (APACS) said it was to work with a number of high-profile High Street names - including Tesco, Dixons and Marks & Spencer - to test the new cards.

The cards will have a chip inside them, capable of carrying a lot more information than the current magnetic strips, which will eventually be phased out.

Within the next three years, all the debit, credit and charge cards in the UK - estimated at about 100 million - will be re-issued with chip and PIN technology.

APACS said the banking industry had been working on measures designed to cut card fraud since 1995.

"We are confident that the start of the PIN programme will be remembered as the defining moment in the fight against plastic card crime," said APACS chief executive Chris Pearson.

Credit card firm Visa International said its experience in other countries had shown that the introduction of PIN numbers had "significantly" reduced fraud levels.

"When the French first introduced chip cards, fraud losses were almost eliminated within three years," the company said.