BSP to start monitoring of EMV shift progress

Posted on September 30, 2016

THE BANGKO SENTRAL ng Pilipinas (BSP) will start monitoring the progress of banks and other financial entities in migrating to microchip-powered cards due by 2017.

The central bank through Memorandum 2016-013 has asked supervised entities to submit status reports on their progress in shifting to the EuroPay, Mastercard, and Visa (EMV) technology, and is now requiring quarterly reports starting end-September.

In 2014, the BSP issued Circular 859 that required all debit and credit card-issuing companies to shift to the EMV chip technology by Jan. 1, 2017, moving away from the current magnetic stripe. The EMV system -- an international standard -- is deemed “more secure” against fraud.

“In view of the fast-approaching EMV implementation timeline, all concerned BSFIs (BSP-supervised financial institutions) are required to submit a status report of their EMV migration activities/EMV compliance together with a Certification duly notarized and signed by the authorized officials of the reporting BSFI, using the attached prescribed templates,” the BSP’s issuance dated Sept. 27 read.

Reports must be submitted 15 banking days after the end of every quarter to the BSP’s core information technology specialist group at its headquarters in Manila.

The submissions require a detailed timetable from each card issuer or acquirer on the shift to the new system, along with an explanation on the status of the needed changes as of the reference quarter.

Among the milestones include the replacement of chip-reader automated teller machine (ATM) terminals and back-end systems, host certifications with the interbank network BancNet and other payment networks, upgrade of point-of-sale terminals, EMV card production and issuance, and the replacement of all existing magnetic strip cards.

An EMV chip can prevent the transfer of data through skimming, which is a scheme used by thieves to copy a person’s bank details using data stored on a magnetic stripe card. This is usually done by illegally tapping into ATM terminals to acquire client data.

The chip-enabled cards also carry additional security layers and can carry a bigger amount of data than its magnetic strip predecessor.

BSP Deputy Governor Nestor A. Espenilla, Jr. has said that there has been a marked decline in cases of card-related fraud, with hacking seen as the emerging trend.

Mr. Espenilla added that the central bank is currently drafting stricter security standards to address these cases. -- Melissa Luz T. Lopez