Card fraud affects banks and their clients, incurring billions in losses. . .

Card fraud affects banks and their clients, incurring billions in losses. As the tools and techniques of fraudsters become more sophisticated and old security standards remain in place, its prevalence will most likely increase.

Fortunately, a safer security standard for credit and debit card transactions called EMV (Europay, Mastercard and Visa) is being adopted by banks worldwide. One of the early adopters of the new standard in the Philippines is Philippine National Bank (PNB), one of the country’s top private universal banks. Now on its 101st year in business, PNB is an institution with an unswerving dedication to provide pioneering and innovative financial products and services.

“EMV will make our customers more comfortable transacting with us,” said Norman Martin Reyes, Senior-Vice President and Chief Marketing Officer at PNB. “We are adapting to new technologies and we want these new technologies to protect our clients from any future issues or risks.”

EMV is intended to supersede the magnetic stripe-based mode of payment. The latter revolves around the use of the magnetic stripe found on the back of a card which stores data, which is read by a machine when a card is swiped through it. The data stored is static and unprotected, making them extremely vulnerable to fraudsters who can gain access to them using even relatively simple skimming devices.

The EMV standard does away with the magnetic stripe entirely and taking its place is a small computer chip. The chip generates a unique code for every card transaction, which involves inserting or dipping the card into a terminal instead of swiping it. This dynamic data authentication feature makes data more secure since a reader would reject a card if it detects a familiar code.

With a strong security feature like dynamic data authentication, the EMV chip technology will help reduce incidence of card fraud. It has done so in Europe, where EMV adoption is greater than those in other continents.

The BSP has issued regulations to facilitate the migration of the country’s payment network system from the magnetic stripe to the more secure EMV, and ordered institutions under its supervision to make the shift come 2017.

“We want to send a message to industry regulators that PNB is serious in investing in technology that protects our customers,” added Joel Tirona, Assistant Vice-President for Electronic Channels.

Starting last year, PNB has been issuing cards equipped with the EMV chip technology. In addition, Mr. Reyes confirmed that all of PNB’s automated teller machines (ATMs), numbering around a thousand, are EMV-compliant. The bank is currently in the middle of recarding which involves issuing EMV-enabled cards to clients who still possess cards with magnetic stripe. New accountholders are issued EMV-enabled cards.

In closing, Damasen Paul Cid, Vice-President for Electronic Channels, said, “PNB is a progressive and forward-looking financial institution and we’re taking advantage of technology and innovation.”