BSP expects banks’ early shift to EMV

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Banks are expected to shift to more secure chip-based credit and ATM cards earlier than the January 2017 deadline.

The BSP said the early shift is a result of Visa refusing to shoulder the cost of card fraud if it is still a magnetic strip card.

EMV or Europay Mastercard Visa is the global standard for chip-based credit and debit transactions said to be more secure than magnetic strip cards. The chip contains information needed to use the card for payment, and is protected by various security features.

According to Bangko Sentral ng Pilipinas (BSP) Deputy Governor for Supervision and Examination Sector Nestor Espenilla Jr., banks are shifting earlier than the deadline because it is costlier for them to carry the magnetic strip cards.


Espenilla said banks who are still using magnetic strip cards by October will have to shoulder the cost if they have encountered card fraud like skimming.

“Visa will not shoulder the cost of card fraud if a particular bank is still using magnetic strip card. Its costing them [banks]money to maintain that technology. So it makes sense to them to go to EMV sooner than the regular timetable. It is actually what we are expecting to happen,” he said.

In November last year, the central bank has approved the implementing guidelines for banks’ migration for banks’ migration plan to EMV chip-enabled cards in line with its continuing efforts to strengthen the banking system’s electronic retail payment network against card fraud, such as skimming and cloning.

Meanwhile, the BSP noted that the banking industry shall be given the flexibility to agree on and implement detailed technical and operational requirements, policies and procedures covering transaction routing, testing and certification, dispute and fraud risk management and other EMV-related processes.

Since December 2013, the BSP said it has been closely working with key industry players to come up with a viable strategy to comply with the EMV migration requirement.

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