Customers will enter a four digit code instead of signing

The system was supposed to be well established by Christmas, but banks and retailers are making slow progress.

Instead of signing a slip when they use their cards, customers will enter a four digit pin number under the system.

For it to work more than 122 million debit and credit cards will have to be reissued and more than one million tills replaced.

National retailer

The chip and pin system has been hailed as a major step forward in the fight against the �400m lost each year to card fraud.

But some banks have not yet issued a single new chip card.

And only one national retailer has the right equipment to read the cards in place in all of its stores.

The Association of Payment Clearing Services (Apacs), the industry body responsible for the change over, said it cannot confirm progress so far.

But it said it was confident that most Britons would be using chip and pin by the end of 2004.

Most vulnerable

Fraudsters steal about �800 a minute from people's credit and debit cards, Apacs said.

Payments where the owner is not present to sign a receipt are most vulnerable to fraud it added.

Most people, Apacs added, did not realise credit card receipts contained all the information needed by a fraudster.

It urged people to be more aware and shred bank statements and receipts.