BSP to penalize non-EMV compliant banks by June 30

Philippine banks must completely shift to the Europay, MasterCard, Visa (EMV) system by June 30, or face monetary sanctions, the Bangko Sentral ng Pilipinas (BSP) said Thursday.

"BSFIs (BSP-supervised financial institutions) are given until 30 June 2018 to fully comply with the EMV requirement," it said in an emailed statement.

The BSP last year set a January 1, 2017 deadline for BSFIs to meet the EMV chip technology requirement, and directed banks to full responsibility should clients fall prey to fraudsters.

“Unlike a magnetic stripe card, every time an EMV card is used for payment, the chip on the card generates a unique transaction code that cannot be used again. This feature, known as dynamic authentication, makes it difficult, if not virtually impossible, and costly for fraudsters to counterfeit EMV cards,” the BSP said in a separate primer.

In its latest advisory, the BSP said banks that fail to shift to the EMV system by the end of June will face monetary sanctions.

"The guidelines prescribe a hard deadline for compliance as well as clearly defined consequences for non-compliant institutions," it said.

"Failure to do so will subject BSFIs to monetary sanctions provided under relevant provisions in the Manual of Regulations for Banks and Manual of Regulations for Non-Bank Financial Institutions," it added.

In the same statement, the BSP ordered BSFIs to start setting aside funds for probable losses from fraud.

"In the interim, non or partially-compliant BSFIs are mandated to book provisions for probable fraud losses starting 30 September 2017 until full compliance is achieved," it said. — Jon Viktor Cabuenas/VDS, GMA News