The deadline for migration to chip cards is just about two months away and yet only about a tenth of the automated teller machine (ATM) card base has been converted. In Q&A Datuk Mohd Hata Robant, MD Malaysian Electronic Payment System (1997) Sdn Bhd (MEPS) responds to come queries.
How is the response to migration to ATM chip cards? How many have converted so far?
Hata: The conversion of the old ATM cards on magnetic strip to Bankcard (a smart card with multiple applications) is being conducted by respective financial institutions (FIs). To date, over 1.5 million cards have been converted to Bankcard.
Is there a deadline for migration?
The ATM magnetic stripe card conversion to the Bankcard is targeted to be completed by June 2003. As the issuer of Bankcard, all FIs will constantly monitor the progress of the conversion exercise.
Does MEPS levy charges on banks in relation to usage of chip cards?
MEPS does not charge the banks for the usage of Bankcard.
Is the RM8 a one-off charge by some banks for conversion or is there a yearly maintenance fee?
The charges and conditions with regards to Bankcard charges are decided by individual bank and not by MEPS. Individual banks have the discretion whether a fee will be imposed or otherwise. The said fee for Bankcard can vary up to a maximum of RM8 per annum.
How much has been invested in technology in relation to chip cards? How much does it cost to maintain the system to operate chip cards?
The implementation of Bankcard has been initiated and driven by all the 12 local FIs and the cost varies from one FI to another.
Where MEPS is concerned, our investment was in the inter-bank system, technical/ specification, development cost for the smart card as well as the e-Purse scheme including the ownership of a long-term licence to operate the Proton World e-Purse scheme.
As for the FIs, they bear the cost of the cards and the upgrading of the ATMs and its network to support the smart card.
What additional security features are offered?
Security features in Bankcard are as follows:
·Bankcard is tamper-resistant and offers an enhanced security.
·It is extremely difficult and costly to observe or change critical data stored without the proper facilities.
·The transaction device contains a secure application module (SAM) which is a secure computer component integrated into a payment processing terminal and includes both software and hardware protection.
·The key management provides the security of the operation and protects the cards from any unauthorised reproduction. The keys are managed in a diversified manner.
·The security system of any one application is segregated from other applications located in the same memory.
·In the event that the security of one application is compromised, other applications are to remain secured.
·Bankcard chip is based on Proton World International standard and consists of a proprietary file structure and specifications that conform to the ISO7816 standard.
In the event of unauthorised attempts at ATM transactions using chip cards, how will MEPS be informed?
The ATM machines are owned and managed by the respective FIs. In terms of security, the FIs have taken various steps to ensure there are no unauthorised withdrawal attempts.
However, consumers must also take the necessary steps to ensure that their personal identification number (PIN) is not revealed to anyone and that it is good practice to change the PIN every now and then.
Nevertheless, should there be any unauthorised attempts, each FI will conduct investigation of fraud cases and work hand-in-hand with the authorities.
How long will reminders be posted at ATMs to convert into chip cards?
The FIs are the issuers of Bankcard. All FIs are currently undergoing a card conversion exercise. Each FI will advise the respective bank customers accordingly.
In view of the need for verification, will an ATM transaction using chip cards take a longer time?
The time taken for any transactions at the ATMs is the same, if not faster, compared to using the previous magnetic strip cards.
Are ATM cards getting more popular? Please provide some comparative figures.
With the various services being offered via ATMs, consumers are enjoying the ease and convenience of making transactions. To date, there are over 11 million cardholders in the market. In year 2000, there was a 10 million card base and as of March 2003, this has grown close to 12 million.
Will there be additional functions offered by chip cards?
The Bankcard has higher information storage capacity and can allow multi-applications to reside on a single card. Currently, it has three applications - ATM, e-Debit and MEPS CASH.
Since it is capable of storing multi-applications, in the near future, other applications such as loyalty programmes can be stored.