Naas and Newbridge have been chosen to test the introduction of new credit card and point-of-sale technology as part of an international effort to combat credit card fraud.

From mid 2004, consumers in the two Co Kildare towns will be the first in Ireland to verify card transactions by entering a four-digit PIN instead of signing a paper receipt.

A phased national roll-out of the new system will take place over the later part of 2004 and will be co-ordinated by the Irish Payment Services Organisation (IPSO). Between now and the beginning of the trial in mid-2004, card providers will issue customers with new chip-enabled credit and debit cards.

Mr Barry O'Mahony, IPSO's chip and PIN programme manager, said use of the new technology would not solve all types of card fraud, but would reduce counterfeit fraud, the most frequent and fastest growing type of card fraud.

Chip-enabled cards are harder to copy than magnetic stripe cards, while using a PIN rather than signing a receipt "closes the security loop" by avoiding the possibility of signature forgery. Mr O'Mahony said Naas and Newbridge had been picked for the trial because they were a manageable area in size and were near Dublin.

IPSO said it was important that the Irish market was in line with, or ahead of, the implementation of chip and PIN technology across Europe to protect against the possible migration of card fraudsters to Ireland.

"In particular, the UK has just completed trials in Northhampton. They have credit card fraud in very substantial numbers in the UK and we don't want that moving to the next softest target," Mr O'Mahony said. He added that, although Ireland was a year behind the UK, the smaller market here - three million cards compared to 20 million cards - meant the system could be introduced nationally at around the same time.