Philippine banks OK use of latest anti-fraud credit/debit card chips
MANILA, Philippines–Local banks have signed an agreement to expand the use of a technology that promises to make the use of plastic money safer in the Philippines.
This comes amid the persistent problem of “cloning” and other types of fraud affecting credit and debit card holders, which leads to hundreds of millions of pesos in losses every year.
In a statement, BancNet, the country’s largest and soon-to-be sole interbank payments network, announced the signing of a deal with global financial giant Visa for the use of the latter’s EMV chips by local banks.
“Trust underpins all transactions,” Visa country manager for the Philippines Stuart Tomlinson said. “We are committed to ensuring consumers are protected whenever and wherever they transact electronically,” he said.
Under the new deal, BancNet would be allowed to access Visa’s EMV implementation standards to facilitate EMV chip conversion for all domestic transactions.
This includes not just issuing chip-enabled cards, but also ensuring that automated teller machines and point-of-sale terminals meet the internationally recognized chip-standards by Jan. 1, 2017—the deadline for the shift set by regulators.
EMV—which stands for Europay, Mastercard and Visa—is a technology developed by the world’s three major cards that contain an embedded microprocessor that creates a new transaction code every time the card is used.
This antifraud measure provides strong security features previously not possible with traditional magnetic stripe cards.
With the partnership with BancNet, EMV technology will be available to virtually all banks in the country. Last month, BancNet signed a deal to merge with its smaller rival Megalink to form the largest ATM network in the country.
BancNet and Megalink are owned by different consortia of banks. They were both put up to allow bank clients to use ATM machines that are not from their own bank.
“Upon completion (of the EMV) migration, local banks and businesses will be highly protected against counterfeit fraud, and less likely to be targets for skimming and data theft,” BancNet chair Manuel Tagaza said.
“BancNet will be able to further strengthen the security of its ATMs as well as fundamentally bring greater security to the delivery of financial services across all channels,” he added.