Datacash, the AIM-listed provider of bank independent payments services to the card not present market, says that a cautious approach by retailers to their Chip and PIN investment strategy has so far stymied its efforts to penetrate the high street market.
In a pre-close trading statement, the UK-based company says that it achieved pre-tax profits for 2004 in line with expectations and ended the year with more than £3m in net cash, compared to £1.55m at 31 December 2003.
In March last year, Datacash joined an IBM-led consortium developing a Chip and PIN payment terminal for rental by the mid-tier retail sector amid evidence that smaller traders were finding the cost of upgrading legacy software systems and hardware too expensive.
In its trading satement today, Datacash says: "It is clear that many retailers in the company's target market are still considering their strategy, and are approaching the issue of the new technology with caution in view of the investment required."
A recent survey of the UK high street by Retail decisions found that fewer than half of UK retailers are using the chip and PIN system for processing card transactions, despite the threat of a liability shift from banks for non-compliant teminal transactions.
The survey found that mid tier retailers remain exposed and have held back from implementing chip and PIN due in part to a lack of integrated systems suitable for them.
Despite the difficulties experienced thus far, Datacash maintains that "the opportunity generated through the introduction of 'Chip and Pin' remains intact".