What is EMV?
EMV (stands for Europay, MasterCard and Visa) is the global standard for credit, debit, and prepaid card payments using the chip card technology. EMV chip-based payment card is a more secure alternative to traditional magnetic stripe payment cards.
In terms of customer experience, EMV chip-compliant cards are read in what is called “card dipping” mechanism instead of the usual swiping of magnetic stripe cards. Because of the additional validation and data flows for the EMV chip-compliant card, the process may not be as quick as the swiping process. Hence, the customer must be patient and understand the trade-off between security and performance. The infographic below shows the EMV chip card acceptance/validation process:
Why is there a need to adopt EMV technology in the Philippines?
The EMV chip technology has been proven effective in significantly reducing counterfeit fraud, skimming and other related attacks perpetrated in magnetic stripe payment cards. Consequently, fraudsters have shifted their efforts to countries which are still highly reliant on the magnetic stripe technology, such as the Philippines. Thus, it is imperative for the Philippines to adopt EMV technology to address the increasing rate of counterfeit fraud, safeguard the interests of the public and promote interoperability with international payment networks. Towards this end, the BSP has put in place the necessary regulatory and supervisory framework to enable the migration of the entire payment network to EMV technology. This is fundamental to BSP’s mandate to foster the development of safe, secure, efficient and reliable retail payment systems and uphold consumer protection.
How will the EMV requirement affect –
When is the deadline for EMV migration?
What happens when BSFIs are not yet fully complied by 01 January 2017?
While the EMV infrastructure and environment are still in the process of achieving full stability, customers may still use their magnetic stripe cards after 1 January 2017. However, non- or partially- compliant BSFIs shall be subject to ECFLSF. This means that the BSFIs which have not yet or have only partially adopted the EMV technology shall be held responsible for losses associated with the use of a counterfeit card in a card-present environment. The BSP may impose additional enforcement actions pursuant to BSP Circular No. 875 dated 15 April 2015 on BSFIs that fail to demonstrate conscientious effort towards full EMV compliance.
The allocation of liability for counterfeit fraud is summarized as follows: