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Major banks begin debit card transition process
Large lenders say that they have begun the process of changing their debit cards from using a magnetic strip to a chip, as obliged by the countryâs financial regulator to guarantee cardholder security
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arge lenders say that they have begun the process of changing their debit cards from using a magnetic strip to a chip, as obliged by the country's financial regulator to guarantee cardholder security.
The lenders are Bank Mandiri, Bank Rakyat Indonesia (BRI), Bank Central Asia (BCA) and Bank Negara Indonesia (BNI).
State-owned Mandiri has begun the process by developing a new system that will allow its automated teller machines (ATMs) and electronic data capture (EDC) machines to process the new cards, according to Muhammad Gumilang, the bank's vice president in charge of individual and investment products for its mass banking group.
As of now, Mandiri has around 11.8 million debit cards circulating in the country.
Its total number of ATMs and EDC machines exceeds 11,500 and 240,500, respectively.
'We have set a list as well to determine which customers will be prioritized to receive the new cards. We will then begin distributing them in the fourth quarter of 2014,' he said on Tuesday.
The change for Mandiri's customers will first take place in Jakarta, followed by other cities and towns.
Gumilang said that the amount of cards replaced would also surge as a higher number of card vendors received certification in compliance with the payment card industry data security standard (PCI DSS).
As previously reported, Bank Indonesia (BI) is requiring all lenders to put chips in their debit cards by the end of 2015 at the latest.
The chip will provide higher security as it will make it harder for fraudsters to dupe customers and banks.
Data from the central bank shows that there are 56 debit card issuers at the moment, ranging from state-owned to foreign lenders.
Meanwhile, BRI ' the lender with the largest number of debit cards ' is waiting until the beginning of 2015 to start replacing its customers' cards, which currently amount to 26 million.
BRI electronic banking general manager Imam Subowo said that all of the bank's card readers ' with 18,500 ATMs and 86,000 EDC machines ' were now ready to process the cards.
'But there are only three card producers that are already [PCI DSS] certified,' he said in a text message.
Similar to Mandiri, BRI also plans to set categories for its customers, starting from customers with 'priority status' to those having platinum cards.
Contacted separately, Ina Suwandi, BCA funding and services division head, said that the private bank was preparing its infrastructure to accept the new cards.
'Preparations are ongoing and we are upbeat about completing BI's requirement before 2015 ends,' she said, adding that BCA's debit cards totaled 12 million as of June.
Another state lender, BNI, was confident it would be able to replace 9.7 million of its debit cards starting within the next few months.
'The standard is there and the system is ready. We are committed to carrying out the whole process as required,' Dodit Wiweko Probojakti, BNI head of consumer products and retail division, said.
The first priority, he added, would be given to its platinum and gold customers, with 350,000 cards.
