Banks get BSP ultimatum on mandatory shift to EMV

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) has given an ultimatum to banks to fully comply with the mandatory Europay-Mastercard-Visa (EMV) technology to address the interoperability issues being experienced by clients.

BSP Deputy Governor Nestor Espenilla Jr. said banks have to upgrade their equipment and systems such as ATMs on top of replacing credit, debit and prepaid cards.

“The shift to EMV is not just about putting physical chips. You have to be certified. That is why the EMV journey is very complex,” he said.

Espenilla said he would submit another report to the Monetary Board regarding the progress of banks in complying with the shift to the EMV technology.

“We also still need another deadline regarding everybody, a hard deadline. The challenge is tailor fitting. We haven’t really put that out yet but most likely there is an outer deadline afterwhich there will be hard sanctions,” he said.

EMV is a global security standard for payment transactions. It ensures interoperability between chip cards and devices that accept these cards. An EMV chip card is therefore more secure than a magnetic-stripe card wherein stored information is static and can be copied with relative ease and cloned by fraudsters.

 All BSP supervised financial institutions were given until Jan. 1 to migrate to EMV technology in order to drastically reduce, if not totally eliminate, fraud due to card skimming and counterfeiting as it provides cardholders better protection from unauthorized access to their accounts.

However, the shift to the EMV technology among financial institutions has not been synchronized resulting in interoperability issues particularly with regards to chip and PIN or chip and signature transactions.

Several banks have yet to comply with the EMV certification of Bancnet that covers the banks’ host systems, ATMs and chip cards.

The tests and certification of host systems are done at Bancnet while the tests and certifications of ATMs and chip cards are done at the laboratories of the world’s leading EMV migration service provider FIME.

Bancnet said interoperability issues affect banks with non-certified chip cards and ATMs.

Espenilla said the BSP has already issued the EMV Card Fraud Shift Liability Framework providing the allocation of liability and resolution of disputes in fraudulent transactions arising from the shift to the EMV technology.

Bank Marketing Association of the Philippines president Allan Tumbaga of East West Banking Corp. urged cardholders to transact in the ATMs of their own banks while the perceived issues are being addressed.