SMALL businesses who do not switch to chip and pin are being warned they could be targeted by fraudsters.

About one in ten tills in the UK will not have been changed to chip and pin by the deadline tomorrow.

From then, businesses without chip and pin will be liable for credit card fraud carried out on their premises.

The Association for Payment Clearing Services (Apacs), which represents banks and credit card companies, said 770,000 out of 860,000 tills had so far been upgraded to chip and pin.

But some small independent shops, medium-sized chains and restaurants have no plans to switch over.

Apacs spokesman Ben Thomas said: "Some people won't choose to enrol in the system.

"These will tend to be retailers who do much smaller transactions and where fraud is less likely to occur."

But he warned: "Many who don't come across will find that fraudsters will find them out as a loophole."

The Association of Convenience Stores (ACS), which represents 32,000 shops, said smaller retailers who had to buy their own equipment were least likely to switch to chip and pin because of the cost.

ACS spokesman Shane Brennan said: "Chip and pin has had massive success on cutting down on card fraud, but there is growing concern among our members that the card fraud crime is being displaced to other kinds of crime, like theft against retailers."

After the deadline, shops will have the right to decline payment from chip and pin cards if the cardholder does not know their pin.