Fraud involving the stealing and counterfeiting of debit and credit cards has fallen 29% year-on-year in 2005, a banking body has said.
140 million chip and pin cards are being issued by banks
Between January and June these types of card fraud cost banks £89m, compared with £127m for the same period in 2004.
The Association of Payment Clearing Services attributed the fall to the introduction of chip and pin cards.
However, the figures are incomplete as they do not include card fraud over the telephone or internet.
In addition, the figures do not include fraud committed when cards go missing in the post.
Precise figures for these types of card fraud will be released next month.
Chip and pin cards aim to cut fraud by including a smart chip, which can store more information than the usual magnetic strips, and also by having users verify transactions by keying in a pin number rather than signing a receipt.
France pioneered the technology more than 10 years ago - reportedly cutting fraud by almost 50% as a result.
Latest figures show the roll out of nearly 140 million new chip and pin cards has almost been completed.
"This is the final phase of the successful chip and pin roll out," a spokeswoman for the association (Apacs) said.
"More than nine out of 10 people have a chip and pin card and there are a hundred successful chip and pin transactions a second."
Tightening the net
Apacs announced that the banks and retailers, in a bid to tighten the net on fraudsters, had agreed to make it harder for consumers with chip and pin cards to pay for goods in shops without using their pin.
During the introductory period of the chip and pin system, if cardholders do not know their pin number, retailers have been able to accept a signature, after first checking with the card issuer.
From 14 February 2006, banks and chip and pin functioning retailers have decided to curtail this facility.
"Customers can expect to be asked for a different method of payment if they don't have their pin number," an Apacs spokeswoman told BBC News.
According to the British Retail Consortium (BRC) this should present few difficulties for shoppers.
"Our experience in shops shows that most people have taken to chip and pin like ducks to water," BRC director Paul Smith said.
"Now it is time to encourage those not using pin to get ready to do so by 14 February next year, so that we can have even more fraud out of our shops."