The Market Monitor Minding the Nation's Business
Jerry Maglunog
Seventy percent of all ATMs (automated teller machines) in the country or over 7,000 ATMs are magnets for skimmers who victimize unsuspecting depositors of their cash via unauthorized withdrawals from their accounts. The reason: most of the ATMs are not equipped with pin pad shield, the most basic element to prevent skimmers from taking advantage of the ATM users, said a head of a big ATM channel of one big bank.
The ATM channel official told Market Monitor that so far, the banks with the pin pad shields are those owned by Banco de Oro, Metropolitan Bank, Bank of Philippine Islands, Security Bank and some other big banks.
Pin pad shield works like an ATM’s anti-bodies for phishers’ gadgets that are capable of deciphering the data of a bank user, which includes the personal identification number and money in the account.
Without this shield, the phishers, mostly foreigners, can get the data and produce a similar ATM to withdraw the money. During the last two years, three phishing incident were reported and all the suspects are foreigners.
He said foreigners are less suspicious of being involved in the crime because when arrested they can say they don’t understand the instruction as they don’t speak English while the gadgets can be used as their aid in withdrawing money.
Aside from being unsafe from phishers, many terminals are most of the time offline of under maintenance, which, in layman’s term, mean don’t have money. ATMs with these signage have either ran out of cash or have been cut from line due to many reasons, most commonly by power interruption.
“Being off is not a big problem; the bigger problem is when it’s hit by phishers,” the official added.
The official added that when Microsoft ended the support for software of banks in April last year, worries about money being stashed via ATMs widened. “That alone is another headache for many banks,” he added.
It was announced by Microsoft last year that software support for XP, the system used by banks in operating their ATMs, has ended and banks can only get similar support if they avail the service of the newer version of the decommissioned system.
The ATM head of the bank said although he doesn’t have sufficient data to back his worries, the current status wherein the top seven banks have the pin pad shield will cement his worries about the capacity of banks to migrate to the newer system to be able for their ATMs to be protected.
Until now, the official said he doubts that at least half of the 34 unibanks in the Philippines have been able to migrate their system from XP to newer version. He said that in 2009, the year when his bank equipped all their over 2,000
ATMs with pin pad shield, the bank spent nearly P100 million to enable all their ATMs to have the apparatus.
“That is not a small investment because that’s how we value our depositors,” he said. The huge investment to make each ATM safe from skimmers and phishers is the main reason why those banks in the upper echelons of assets, capital adequacy ratio and total loan portfolio request for increase in withdrawals and account balance.
“If they limit us from increasing the rate needed to reciprocate our investment, it’s like limiting our reach to protect the depositors,” the official said.
He added that it is a big injustice for big banks to have a disparity in withdrawals using other banks’ ATMs because most people don’t want to use ATMs owned by not so popular banks. “Most of the time they run to those owned by us.
The service that is supposed to be provided by his own bank is provided by us,” he said. Their terminal alone in Glorietta 2 has over 2,000 transactions. Of these withdrawals, funds transfer and account balance, only 40 percent are made by the bank’s depositors.
Jerry Maglunog