BSP bullish banks can meet EMV shift deadline

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By Janine Marie D. Soliman,

THE BANGKO SENTRAL ng Pilipinas (BSP) is bullish all banks will be able to fully migrate their systems to the Europay, Mastercard and Visa (EMV) technology by June next year.

The central bank chief said they are optimistic local lenders would be able to meet the June 30, 2018 deadline for shifting their systems to the microchip-powered technology, with the regulator not looking into further extending the date.

Originally, card-issuing entities had to fully migrate to the EMV standard by Jan. 1, 2017, as said under the BSP Circular 859 issued in 2014. But with most banks yet to switch to the platform amid challenges, the central bank last June gave lenders an extension to adopt the EMV technology.

Banks will have to face a penalty should they fail to meet the deadline by end-June next year, according to BSP Governor Nestor A. Espenilla, Jr.

“We made it June 30 because we also consulted with the industry what is doable, so that’s based on what is doable,” he said in a recent interview.

“But as I said, June 30, it doesn’t mean that between now and June 30, nothing will happen because there are already obligations that have to be met like provisioning,” Mr. Espenilla added.

The BSP chief said they have been seeing the “behavior” they want from banks as they migrate to the EMV platform, such as the practice of making business decisions ahead of the deadline “and not waiting for June 30.”

However, he also noted some lenders, particularly the big banks, also face physical challenges — like clients not willing to change their magnetic stripe cards to microchip-powered ones — when migrating their cards, automated teller machines (ATMs) and systems to  the EMV technology.

Yung mga aabot pa ng (Those who will still reach the) June 30 [deadline] is because it’s physically impossible for them to implement earlier, especially yung malalaki dahil ang dami nilang customers, ang hirap i-reach (the big banks because they have so many customers who are hard to reach,)” Mr. Espenilla said.

Big banks such as BDO Unibank, Inc. (BDO) and Bank of the Philippine Islands (BPI) said in June that they are currently in the process of migrating to the EMV platform after both lenders experienced technological problems — in particular, skimming and human error, respectively.

BDO President and Chief Executive Nestor V. Tan had said they are in the middle of distributing their EMV-enabled cards to their depositors, while BPI President and Chief Executive Officer Cezar P. Consing said they were scheduled to replace their old cards last month, way ahead of the deadline.

Mr. Espenilla had also noted shifting to the EMV technology is the “long-term” solution against card skimming.

EMV technology makes use of microchips rather than the traditional magnetic strip found at the back of cards, which are prone to skimming — usually done by illegally tapping into ATM terminals to steal client data. As a result, EMV makes depositors and credit card holders “more secure” against fraud.

According to central bank data, there are around 76 million debit and prepaid cards in the country while there are 8.5 million credit cards. Local banks also operate 19,084 ATMs across the country.