Banks in the Philippines are set to comply with the central bank mandate of replacing the magnetic strip cards used in all automated teller machines (ATMs) in the country with the more secure EMV (Europay, Matercard, Visa) chip technology by 2017, thrift bank Sterling Bank of Asia said in a statement on Wednesday.
The thrift bank said Philippine banks have joined forces to combat the worsening problem of fraud involving ATM cards and are working double time to fully replace their magnetic strip cards into EMV chip cards.
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 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.
The BSP earlier said that about 1,272 incidents of ATM fraud took place last year, nvolving about P220 million, which was well above the recorded P175 million lost to scams in 2012.
Various modes of ATM fraud include putting a skimming plate on top of keypads to copy personal identification numbers (PIN) of depositors and illegally withdraw money from bank accounts.
ATM fraud also involves placing a card reader with a memory chip, which copies data from the ATM card, and installing a camera to acquire the cardholder’s PIN.
According to Lamberto Villena, Sterling Bank of Asia president and chief executive officer, local banks will be coming up with a locally issued EMV chip card that can be made available to all domestic banks to replace magnetic strip cards.
The thrift bank added that the Philippine EMV chip card will be most helpful for banks that may not be accredited or certified by international issuers of the EMV cards.
Besides being the first domestic bank to release the locally issued Visa card with EMV chip, Sterling Bank said it is also actively involved in the BancNet task force on the migration to EMV chip cards with four universal banks.
“For banks like us that already have an arrangement with EMV chip card issuers like Visa, the accreditation or certification process will be easier. The problem will be for banks that do not pass the standards of Visa or Mastercard or other schemes. They are still required to shift to the technology,” Villena said.
Finally, Sterling Bank reiterated its commitment to be among the pilot banks for EMV testing in preparation for the migration.