Out with pass codes, in with pass shapes. A new method of withdrawing money or making payments will upgrade chip and pin technology by using sudoku-style shapes to generate random numbers.

Instead of memorising a four-digit number, users will need to recall the fixed position of four squares on a grid and type in the random numbers appearing in them.

Less than two years after the introduction of chip and pin to replace magnetic strips for reading cards at a total cost of more than £1 billion, banks and retailers are considering using the grid-based system to stay ahead of fraudsters.

The problem of high-tech crime was highlighted yesterday by parliament’s all-party group on identity fraud, which reported that in 2006 170,488 cases were logged, costing more than £1.7 billion.

The committee called for an identity fraud czar to be appointed to coordinate efforts against the crime by police, businesses and the government.

Under the proposed system, when a credit or debit card is inserted in a terminal a grid of 25 squares appear on the screen with random numbers in each square.

The user then types in the numbers appearing in the squares of their chosen shape. Different numbers are generated each time for each square, so potential fraudsters would not be able simply to copy the numbers entered by other users.

Gridsure has been devised by Jonathan Craymer, 57, a journalist and website designer, and Stephen Howes, 44, a software engineer and IT director. The idea has received initial support from at least one government department and industry bodies.

Craymer worked out the idea after a friend asked whether it was possible to produce a new number for every transaction. “Like a crossword clue that bugs you, it sat in the back of my mind for weeks. In the end we cracked it in half an hour on the kitchen table,” he said.

A pilot study by University College London found that 93% of participants could remember their personal shape and the transaction process five weeks after being introduced to the system.

However, a spokesman for Apacs, the UK payments association, warned that people with poor spatial awareness might find it harder to remember. Mastercard has examined the system and is considering whether to endorse it as an upgrade to chip and pin.

Bank machines would only require a software upgrade to handle the new system. However, bigger screens would be needed to accommodate the graphic.

The system can also be used in conjunction with mobile phones by flashing up the grid whenever users make a payment. Masabi, a British mobile phone security company, is putting a system incorporating Gridsure on sale later this year.

Technical trials began last week in Cumbria.

Overseas card fraud more than doubled to £109m in the first half of this year, a rise of 48% on the year prior to the introduction of chip and pin.

Shape of the future New card payment system uses shapes as well as numbers

1 User remembers ‘pass shape’ of four squares in grid of 25

2 Each time card is inserted, random numbers appear in each square of grid

3 User authorises payment by entering numbers according to the pass shape

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