PETALING JAYA: All signature-verified credit and debit cards must be replaced by the end of 2016, but users will still be able to sign on purchases until July 1, 2017.
“This is to enable credit users to familiarise themselves with the new system,” said Paul Brisk, founding director of payment system consultants Cotignac.
If a user enables the PIN on his or her new card but can’t recall the six digits, a signature will still be accepted within this time frame.
The exception to this is a user travelling to a country with a PIN system already in place.
“If you use your card there, the terminal will identify that you have a PIN for the card. In which case, you may not be able to use a signature,” said Brisk.
Banks and other card issuers who fail to replace all signature-based cards by the year’s end must notify Bank Negara and provide a reason.
Card users must activate their PINs within the time frame stated by issuers.
Depending on the issuer, users can do this via Internet banking – which most issuers are looking at – as well as interactive voice response, ATM or at a branch terminal.
If card users don’t switch to a PIN card, the old signature-enabled cards will stop working after 90 days (for credit cards) or by July 1, 2017, for debit cards.
“As of April, about 36,500 terminals have been upgraded to support PIN-enabled transactions,” said Chuah Mei-Lin, executive director of the Association of Banks in Malaysia (ABM).
The bulk of the upgrading is expected to start this month, and be completed by the end of the year.
These include attended point-of-sale terminals, such as those in shops, and unattended such as in petrol stations.
Outlets with upgraded terminals will all display the Pin & Pay logo.
“Under the PIN migration exercise, the real challenge has come from debit card users,” said Brisk.
“Most of these aren’t mailed directly to the customer, as they have to be personalised on collection and require MyKad identification.”
He said more than half of the new PIN-enabled debit cards issued had yet to be collected.
Chuah said debit cards were becoming more important as Bank Negara was encouraging their use.
“Cash is an expensive payment instrument which imposes an unnecessary cost to the economy.
“Besides the costs of printing and distribution of banknotes and coins, there are also cash handling costs and provision of cash services to the public,” she said, adding that the banking industry incurred a cost of about RM1.8bil a year due to cash handling and services.