Fraud involving the stealing and counterfeiting of debit and credit cards has fallen 29% year-on-year in 2005, a banking body has said.

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."

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. But 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.