By Melissa Luz T. Lopez, Senior Reporter
THE CENTRAL BANK will stick to its June 30 deadline for all banks to shift to microchip-based cards and terminals to elevate security standards.
Bangko Sentral ng Pilipinas (BSP) Deputy Governor Chuchi G. Fonacier said in a recent interview that the regulator will not extend the deadline for banks to shift to the Europay Mastercard Visa (EMV) technology by the month’s end.
An EMV card contains a microprocessor chip which creates a unique transaction code for each payment.
This is now the global standard as it is deemed more secure compared to using magnetic strip-based cards that carry a fixed set of data used for all transactions.
Ms. Fonacier said the central bank is “firm” on the June 30 deadline and is not considering a fresh extension for banks to migrate all issued cards.
Apart from card replacement, the central bank requires banks to upgrade their back-end and automated teller machine (ATM) terminals to accommodate EMV transactions by the end of the month.
The BSP originally wanted banks to make the total shift to EMV by January 2017, or three years since the requirement was announced in 2014.
BSP Governor Nestor A. Espenilla, Jr. added that the regulator’s concern is how to assess compliance.
“As far as we are concerned, if a bank has completed and has made ready all of the cards, given due notice to its customers, but on June 30 some customers have not claimed yet. To us, we can look at that as substantial compliance already because they have done what they are supposed to do,” Mr. Espenilla told reporters last week.
Several big banks have chosen to start replacing customer cards well ahead of the BSP deadline, with some announcing that old magstripe cards will be deactivated in order to force clients to claim their EMV-embedded cards.
Ahead of the full migration, the BSP has mandated banks to set up reserves for potential card fraud so that they can shoulder the burden and settle potential theft cases for all non-EMV cards still in use.
Central bank officials have said that shifting to the EMV platform is the “long-term” solution versus skimming, which is often done by installing data-capturing devices on ATMs to steal client data.
Beyond June 30, lenders that have not yet deployed EMV cards and upgraded ATMs and point-of-sale terminals could face sanctions and penalties from the central bank.