Migration to chip-based ATM too costly – BSP

CEBU, Philippines - The plan to change the current magnetic strip cards into more secured chip-based automated teller machine cards could entail intensive investment from the banking industry, a central bank official said. 

The Bangko Sentral ng Pilipinas has mandated Philippine banks to produce ATM cards with a new security feature known as the Europay MasterCard Visa electronic chips to prevent              card fraud incidents.

However, Dr. Johnny Noe Ravalo, assistant governor of BSP’s Financial Supervision Research and Consumer Protection Sub-sector, noted the migration process to chip-based card technology could be costly.

Ravalo added it will take time to get the EMV technology fully operational in the Philippines.

The central bank has set 2017 as deadline for banks and other BSP-supervised institutions to phase out the old ATM cards to strengthen the country's electronic payments system and protect consumers from ATM theft.

“We understand the cost that it involves,” the official said in a recent interview. “We are responsive to their needs kay they (banks) really need time to put in place the new infrastructures.”

While it is said the Philippines is the only Asian country that has not yet adopted the new technology, Ravalo pointed out some Asian nations, in fact, are also currently doing developments in their financial systems.

"We're not too far behind in this development," he said, noting that at least seven or eight local banks have already started issuing chip-enabled cards ahead of the central bank's 2017 deadline.

He said ATMs must be upgraded to accept and read EMV chip cards and that banks are expected to invest money to realize this improvement.

He though explained the new technology offers cardholders better security in credit and debit transactions.

EMV is a global standard for chip-based credit and debit transactions and is deemed more secured than the magnetic stripe technology.

The chip technology features additional security layers which, Ravalo said, significantly reduce the occurrence of card scams such as skimming and cloning.

He further explained that chip is protected by various security measures unlike the magnetic stripe whose data can be copied through inserting a device into the ATM.

These skimming devices used by fraudsters can duplicate card using the data. Swindlers usually install small cameras in ATMs to capture the users' PIN code.

Public awareness

The BSP official stressed the strongest deterrent against electronic scams is really public awareness.

The ATM is designed to look symmetrical to the clients. If any unusual thing is observed in the machine, he advised the public not to proceed with a transaction and look for another ATM in a safer place.

With the holiday season, consumers are further advised to take precautionary measures in doing bank transactions.   (FREEMAN)