The Bangko Sentral ng Pilipinas (BSP) has given banks a year to shift from the current magnetic stripe to the chip-based EMV technology or face monetary sanctions for noncompliance.
The various banks have until June 30, 2018, to migrate customer debit or payment cards from the old system to the new and more secure chip-based EMV technology.
EMV stands for Europay, MasterCard and Visa, a global standard for cards with an electronic chip rather than the current magnetic stripe that reads data and process transactions.
“In order to push the banking industry toward full adoption of EMV technology at a much faster pace, the Monetary Board [MB] recently approved the supplemental guidelines on BSP EMV migration requirement.
“The guidelines prescribe a hard deadline for compliance, as well as clearly defined consequences for noncompliant institutions,” the BSP said in its statement.
“Failure to do so will subject BSFIs [BSP supervised financial institutions] to monetary sanctions provided under relevant provisions in the Manual of Regulations for Banks and Manual of Regulations for Non-Bank Financial Institutions,” it said of BSPI.
The BSP earlier rolled out measures mandating the shift from magnetic-stripe technology to EMV technology on cards issued beginning 2017.
However, the banks have yet to meet the requirement and acknowledged not everyone was ready, especially the larger banks with a huge card base.
Under the newly issued guidelines, noncompliant or partially compliant banks are to provide for probable fraud losses starting October 1 this year until full compliance is achieved.
The BSP also ordered banks to raise awareness and manage customer expectations on the replacement of their payment cards.
BSP-supervised financial institutions should intensify their public-awareness programs leveraging on all available communication channels.
“The information should clearly indicate the date when EMV cards are available and ready for pickup by their clients, as well as the related procedures for replacing magstripe [magnetic-stripe] cards and distributing EMV-compliant cards,” the BSP said.
“BSFIs are further expected to develop strategies to entice or force clients to replace their old cards with EMV cards [i.e., deactivation of existing cards by certain date, offering of rewards/freebies, and/or liability shift for skimming incidents],” the BSP said.
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