Banks rush to meet BSP’s EMV deadline

By Jerry Maglunog

Effective January 1, 2017, all 55 million automated teller machines (ATMs) cards and 8 million credit cards must shift to the Europay, MasterCard, Visa (EMV) standard, which basically means that the magnetic strip used in earlier credit cards will soon become history. However, as of now, no more than 30 percent of all ATMs and credit cards in the Philippines are now equipped with the latest technology. 

“Ours is just, I think, 25 percent of our 350,000 depositors,” said a banker from PS Bank who refused to be named. One credit-card company, RCBC Bankard, said that although the rate of migrated credit cards from plain magnetic chip to EMV is just about 25 percent, they are on target to complete the migration on or before Jan. 1, 2017. RCBC Bankard is one of the leading credit cards in the Philippines that has close to 1 million cardholders. The new technology in credit cards and ATMs is one of the conditions set by the Bank of International Settlements, the bank that governs all central banks, in connection with Basel 3 compliance. Out of the number of RCBC cardholders, 75,000 are now converted to EMV from plain magnetic chip. No less than the new RCBC Bankard head, Simon Calasanz, made the announcement recently.

Calasanz was the former president of the Credit Card Association of the Philippines. It took only RCBC Bankard less than five months to have that number of credit card holders to become EMV-powered, the new president added. “We started issuing EMV cards in July this year. Out of the 490,000 cards we have outstanding, 75,000 are already on EMV,” Calasanz said. MasterCard country manager Rene Villa-Real said that migration of MasterCard-powered credit cards is fast, with about 75 percent already running on the new technology. “We are on target for full EMV migration before yearend 2016,” said the official. The Bangko Sentral ng Pilipinas (BSP) has set a Jan. 1, 2017 deadline for all banks to have their credit cards migrated to the next level of security. Banks that will not be able to comply face corresponding penalty, according to BSP deputy governor for supervision and examination sector Nestor Espenilla Jr. EMV is a global standard for credit and debit payment cards based on chip card technology. The standard covers the processing of credit and debit card payments using a card that contains a microprocessor chip. These transactions are often referred to as “chip and Pin” because Pin entry is required to verify that the customer is the genuine cardholder. This is a simplification since the EMV specifications, include other cardholder verification methods, as well.