Banks to adopt new technology on credit cards
Banks have now been allowed to develop their own technology that can ensure the security of their clients’ “plastic” transactions, in line with efforts to minimize fraud in the country.
The Bangko Sentral ng Pilipinas (BSP) last week approved the implementation guidelines for banks’ migration to more secure EMV chip-enabled debit and credit cards. This follows a previous order for banks to get rid of less-secure magnetic strips on cards they issue their clients by 2017.
New rules on the use of EMV technology, which was developed by global financial payments firms’ Europay, Mastercard and Visa, aim to “safeguard customer information, reduce card fraud and maintain interoperability of payment networks,” the BSP said.
The rules approved this week make way for the use of a local version of EMV technology that local banks have been working on for the last two months.
A local version of EMV technology was deemed necessary by Philippine banks to make compliance easier for smaller players that may not have the resources or expertise to use the international version.
“The guidelines entail the adoption of a Philippine domestic EMV specification for proprietary debit cards,” the BSP said in a statement.
“However, it does not preclude the issuers of co-branded cards from adopting established international schemes for said cards,” the regulator added.
The new BSP guidelines also enumerate the regulator’s expectations of banks 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 banking industry would 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, the BSP said.