The Market Monitor Minding the Nation's Business
By Riza Lozada
The Bangko Sentral ng Pilipinas (BSP) directed banks last Friday to use the personal identification number (PIN) as the primary cardholder verification method (CVM) for debit cards.
BSP issued Memorandum M.2016.O11 directing all financial institutions to adhere to its rules governing the adoption of data contained in card electronic chips and PlN as verification method for Europay, Mastercard and Visa (EMV)-compliant debit cards.
The memorandum was issued relative to the EMV implementation guidelines and ensures that the ongoing migration to EMV of the retail payments industry will protect the public against payment card fraud.
The BSP memorandum said the guidelines require retail institutions to “enable a debit point-of-sale (POS) environment that supports online PIN for Philippine-issued debit cards”.
“While migration efforts are still ongoing to support online PlN, the use of signature as a secondary or alternative CVM in cases when the debit card or POS terminal is not yet capable of online PIN verification will be permitted for an interim period of two years after January 1, 2017,” according to the BSP.
Domestic debit card issuers “may continue to include signature as a secondary CVM in co-branded debit cards” but this applies to economic jurisdictions that continue to use signature as the primary CVM.
“Any disputes arising from domestic POS-initiated debit card transactions during the interim period shall be resolved with due consideration of the compliance of the involved issuer and acquirer with the guidelines and this issuance. lf any of the party is not yet fully chip-and-PlN capable, the party that has enabled online PIN-capability shall be given more favorable consideration in the resolution of such disputes. During the same period, issuers shall undertake measures to ensure that all debit cards issued will be chip-and-PlN capable,” the BSP rules stated.
“[Stores], on the other hand, shall enable online PIN processing in all POS terminals deployed and educate their merchants and POS terminal deployers accordingly. Nonetheless, (stores) may continue to support various CVMs to enable the use of foreign-issued cards that primarily rely on CVMs other than online PlN,” the BSP said.
A locally issued debit card is a payment card issued by a duly authorized bank in the Philippines, whether co-branded with international payment network or proprietary, linked to a bank deposit or prepaid electronic (e-money) account.
The BSP guidelines apply only to contact payment card transactions of Philippine-issued debit cards and shall not cover contactless and transactions without the use of the card.
In a related development, the banking industry has been under scrutiny recently as it received numerous complaints from customers availing themselves of cash cards and debit cards.
Published reports said teachers were unable to withdraw the amount of up to P4,000 representing their honoraria for the May 9 polls serving as board of election inspectors (BEI).