Banks will face sanctions and penalties if they fail to follow the guidelines governing the transition from magnetic stripe to the more secure EMV chip-compliant cards in January 2017, Bangko Sentral ng Pilipinas said.
A memorandum signed by Deputy Governor Nestor Espenilla Jr. reminded banks on handling support for magnetic stripe transactions pending full compliance with EMV migration requirement.
EMV stands for Europay, Mastercard and Visa.
Bangko Sentral requires financial institutions to shift the entire payment network from the traditional magnetic stripe to more secure EMV chip technology beginning January 2017. The rules cover ATM debit and prepaid cards in any card-accepting devices and terminals.
The manual of regulations for banks on EMV implementation guidelines requires the domestic switches to ensure the continued support to existing transaction sets and functions provided to consumers; and continued ability to support, in the interim, transactions in magnetic stripe format subject to liability shift policies acceptable to the regulator.
“lssuers, on the other hand, are required to educate consumers to smoothly transition customer experience/expectations from traditional magnetic stripe to EMV chip-compliant cards. In this regard, all concerned BSP-supervised financial institutions should ensure that the above requirements can be adequately fulfilled so that consumers will not be disenfranchised while transition to EMV technology is ongoing,” it said.
“BSP supervised financial institutions should likewise strengthen EMV-related consumer awareness efforts, particularly to allay fears of the consumers that their magnetic stripe cards are no longer usable
come Jan. 1, 2017. … Failure to comply with the above shall be subject to appropriate sanctions and penalties…,” it said.
Bangko Sentral urged banks and other financial institutions to migrate from the magnetic stripe card to the more secure EMV earlier than the prescribed date of January 2017 for commercial reasons.
Espenilla earlier said that migrating from the magnetic stripe card earlier than expected would spare banks from unwanted costs in case of fraud.
He said the upgrade to EMV was on track but if banks were not yet in EMV, whatever happened to the card transactions of their customers would be the banks’ liability.