TWO months before the deadline set by the Bangko Sentral ng Pilipinas (BSP) for local banks to comply with the industry’s Euro MasterCard Visa (EMV) migration requirement, the Bankers Association of the Philippines (BAP) President Nestor Tan expressed fears they may not be able to comply on time.
“I don’t think all can comply, and it’s not necessarily the banks’ fault,” Tan said on the side of the BDO Nomura launch.
In a previous report, Tan told the BusinessMirror the problem lies on the distribution of cards and not on the system upgrades banks have to undergo. The BDO president added that the quality-assurance assessment and tests for the upgraded cards and payment systems would take time and must be properly set before the systems can run on full operation.
“For others that are already EMV compliant, it would take a while for the banks to replace the cards. Because you cannot just replace everything in day one,” Tan said.
The BSP has been working with key industry players since 2013 to create feasible strategies to be able to comply with the EMV migration mandate.
The central bank has mandated all banks to comply with the upgrading of automated teller machines (ATMs) compatible with EMV chip-enabled cards, as well as upgrading debit and credit cards to EMV-enabled cards.
EMV is the international standard for chip-based credit and debit transactions and is considered more secure than the magnetic-strip technology previously used in bank-issued cards in the country.
Data from Euromonitor International reported over 7.36 million credit card on circulation in the Philippines in 2015, while there are 35.36 million debit cards. All the banks are expected to wrap up their migration by January 2017.
Nevertheless, Tan said most major banks will be compliant by year-end. The executive said the BAP is looking into possible discussions with the BSP regarding the deadline of the mandate.
“We will just comply with the risk transfer. What will happen is that the risk will pass on from the EMV-compliant entity to the noncompliant entity,” he explained.
Previous reports from the BusinessMirror said several banks are confident about their compliance as they have already wrapped up their migration. Others, however, are still in the process of migrating into the new system.
The banks set to beat the deadline include Bank of the Philippine Islands, BDO, China Banking Corporation, Security Bank and United Coconut Planters Bank.