Banks told to issue online PIN in 2 years

The Bangko Sentral ng Pilipinas (BSP) has directed banks to provide online personal identification number (PIN) within a two-year period to protect the public against payment card fraud while the shift to EMV (Europay Mastercard Visa)-compliant debit cards is still ongoing.

BSP Deputy Governor Nestor Espenilla Jr. issued Memorandum 2016 – 011 laying down the guidelines on the adoption of chip and PIN as cardholder verification method for EMV-compliant debit cards issued in the Philippines.

“It is the aim of the BSP to ensure that the ongoing migration efforts of the retail payments industry are aligned with the intentions of the BSP, particularly in protecting the public against payment card fraud,” he stated in the memo.

Espenilla said the use of signature as a secondary or alternative cardholder verification method would be permitted for an interim period of two years after January 2017.

The BSP has given all banks until January next year to shift to EMV-compliant cards for tighter security and to prevent ATM card fraud incidents as well as strengthen the country’s electronic payments system. EMV is a global standard for chipbased credit and debit transactions and is deemed more secured than the magnetic stripe technology currently used in most bank-issued cards in the country. Espenilla pointed out online PIN should be required as the primary cardholder verification method for Philippine issued debit cards as acquiring institutions have been mandated to enable a debit pointof-sale (POS) environment that supports online PIN. He added domestic debit card issuers may continue to include signature as a secondary cardholder verification method in co-branded debit cards for the purpose of enabling the use of these cards in other economic jurisdictions that continue to use signature as the primary verification method.

During the two-year interim period, any dispute arising from domestic POS-initiated debit card transactions should be resolved with due consideration of the compliance of the involved issuer and acquirer with the guidelines.

“If any of the party is not yet fully chip-and-PIN capable, the party that has enabled online PIN-capability will be given more favorable consideration in the resolution of such disputes,” he added.