Electronic chip-based cards to replace magnetic stripe tech
The Bangladesh Bank is going to make mandatory for the scheduled banks to introduce electronic chip-based credit and debit cards by replacing the existing magnetic stripe technology-based ones to tackle fraudulent acts, Bangladesh Bank officials said.
To this end, the BB will issue a circular in a day or two asking the banks to introduce electronic chip-based cards by 2014, they said.
The banks will have to replace around 50 lakh cards by the deadline and issue chip-based cards to the new clients after the issuance of the circular.
Besides, the BB will also set guidelines for the banks to ensure more security at the locations of automated teller and point of sale machines, they said.
The BB will issue two separate circulars in this regard in a day or two, added the officials.
The banks now use magnetic stripe technology to keep the information secured but such a system is considered vulnerable, a BB official told New Age on Tuesday.
He said that some banks had recently plunged in skimming acts due to their magnetic stripe-based credit and debit cards.
A magnetic stripe card is a type of card capable of storing data by modifying the magnetism of tiny iron-based magnetic particles on a band of magnetic material on the card, he explained.
Under the circumstances, the BB has taken a move to introduce the electronic chip-based EMV credit and debit cards, he said.
EMV means Europay, MasterCard and Visa, a global standard for inter-operation of integrated circuit cards or chip cards for POS and ATM transactions, he said.
EMV is a joint effort initially conceived between Europay, MasterCard and Visa to ensure the security and global interoperability of chip-based payment cards, he further said.
The country’s banking sector has recently observed that some frauds had kept electronic devices inside the ATMs to get confidential information of the credit and debit cards of the clients.
After collecting the information from the credit and debit cards, they applied for duplicate credit and debit cards to the banks concerned on behalf of the clients.
The cheaters then embezzled a large amount of money from the ATMs using the fake cards.
Such type of embezzlements is usually called skimming fraud, said the BB official.
He said that the number of fraudulent acts at the ATM booths would decrease when the banks would introduce the EMV cards instead of the existing magnetic stripe cards.
Another BB official said that the banks, which will introduce the chip-based electronic cards, will have to take certification from the EMV authorities.
The EMV is now following its own introduced technology and regulations to issue new credit and debit cards, he said.
A bank will get the certification from the EMV authorities when it will be able to conform to the EMV regulations, he said.
European countries have already introduced the EMV cards for card-based transactions, said the official.
Around 50 lakh debit and credit card are now being used by the clients in the country, he added.
He said that the banks would have to introduce EMV-compliant debit and credit cards within the next year.
Under the process, the BB will set separate timelines for the banks to introduce the EMV-compliant cards, he said.
The official said that the central bank would also make providing the password mandatory while making a transaction at a POS.
Clients now use a fixed password when they make transactions at the ATMs and they will have to provide the same password whiling making transactions at a POS, he said.
The BB will ask the banks to take measures to secure the ATM booths from such fraudulent acts, he said.
The central bank will also make mandatory for the banks to keep security guards at the ATM booths round the clock, he said.
Besides, the respective bank will have to inform its guard when the bank’s official will inject the ATM booth in order to cash feeding or repairing the machine, he said.
The BB official said that some frauds had recently embezzled money at the ATM booths by producing a fake identity.
The banks will also be asked to have a chart inside the ATM booths that will tell the clients how to use the machine accurately and that what should be done to keep their information secured.
The BB will also direct the banks to implement the two-step authentication process for ATM transactions.
-With New Age input
