BSP to enforce new Europay Mastercard Visa system on January 1
BSP to enforce new Europay Mastercard Visa system on January 1
Despite the deadline, customers of banks who have not yet replaced the magnetic strip cards with new EMV ones will still be able to use their cards at ATMs after January 1

MANILA, Philippines – Banks in the country who have not shifted to the new Europay Mastercard Visa (EMV) technology will be held liable for any fraudulent transactions committed through ATM cards.

The Bangko Sentral ng Pilipinas (BSP) Monetary board announced in a statement on Thursday, December 29, that it has approved the EMV Card Fraud Liability Shift Framework (ECFLSF) which will take effect on January 1, 2017.

EMV cards are distinguishable by the electronic chip embedded in them. They are considered more secure than cards that use the magnetic strip. The BSP first announced it would require BSP supervised financial institutions to migrate to the EMV system in 2013, with the deadline set for 2017.

The framework sets the general principles in the allocation of liability and resolution of disputes on fraudulent transactions arising from counterfeit cards.

It operates in such a way that a bank or institution that has adopted the secure EMV technology shall be protected from financial liability arising from losses on counterfeit card fraud. The liability for this type of fraud shall shift to a bank which is not or is only partially compliant with the EMV requirement.

“The issuance of the ECFLSF is expected to further accelerate EMV compliance efforts as well as speed up the dispute resolution and restitution process for customers who have valid claims arising from counterfeit fraud or skimming attacks,” the BSP said.

Old ATM cards still work for now

The BSP also noted that the framework will take into consideration the fact that BSP-supervised financial institutions (BSFIs) would not be fully migrated by the set deadline. 

“While substantial compliance has been achieved in updating software, ATM and POS terminals, and replacing credit cards,” the BSP said,  “the replacement and distribution of debit and prepaid cards are still lagging behind because of sheer volume of outstanding cards.”

This means that customers of banks who have yet to replace the ATM cards magnetic stripe with new EMV ones will still be able to use their cards at ATM and POS terminals.

“Pending full migration to the EMV technology, the use of magnetic stripes in payment cards and/or card-accepting devices shall be allowed subject to the ECFLSF.  Nonetheless, banks are expected to achieve full EMV compliance as soon as possible or face monetary penalties and other sanctions,“ the BSP said.

“This is considered fair and appropriate since the industry has been given more than 3 years to undertake full migration,” it added.

The BSP also advised cardholders to update their contact details and cooperate with their issuing banks for the replacement of their magnetic stripe cards with EMV chip-compliant cards. 

It also warned that since the ECFLSF only covers counterfeit card fraud in “card-present” environment, cardholders should immediately report cases of lost or stolen cards to their issuer to prevent unauthorized charges. –

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