BSP issues EMV chip cards guidelines

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The central bank has approved the implementing guidelines for banks’ migration plan to EMV (Europay Mastercard Visa) chip-enabled cards in line with its continuing efforts to strengthen the banking system’s electronic retail payment network.

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

In August last year, the Bangko Sentral ng Pilipinas (BSP) issued guidelines to strengthen electronic retail payment networks and protect against automated teller machine (ATM) card fraud, such as skimming and cloning.

Under the regulations, the BSP required its supervised institutions to shift from magnetic strip technology to more secure EMV chip-enabled cards by January 1, 2017.

In a statement over the weekend, the Monetary Board approved the EMV Implementation Guidelines governing the EMV implementation for ATM debit and prepaid cards in any card-accepting devices/terminals to safeguard customer information, reduce card fraud, and maintain interoperability of payment networks.

For credit cards, only cash advance transactions at ATM terminals shall be covered since other credit card transactions are guided by the rules of the international payment networks, according to the guidelines.

The central bank added that the guidelines entail the adoption of a Philippine domestic EMV specification for proprietary debit cards.

“However, it does not preclude the issuers of co-branded cards from adopting established international schemes for said cards,” it stated.

The guidelines also highlight BSP’s expectations in terms of managing the risks while the banking industry migrates the magnetic stripe payment environment to chip-enabled technology based on the EMV standards.

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.

“Any changes arising from the EMV implementation guidelines shall be incorporated in the EMV Migration Plan and all affected BSIs [BSP-supervised institutions] shall resubmit their updated plan to BSP within sixty (60) calendar days from date of the Circular,” the BSP said.

It added that the EMV Implementation Guidelines shall take effect 15 calendar days after publication of the appropriate Circular in the Official Gazette or a newspaper of general circulation in the Philippines.

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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