B

ank Indonesia (BI) has reminded citizens that beginning Jan. 1 2015, a personal identification number (PIN) will be required to authorize every transaction using credit cards, citing concerns that many Indonesians remain unaware of the upcoming policy change.

'€œThe central bank will implement this regulation next year to increase security during transactions,'€ BI spokesperson Tirta Segara said on Friday.

At present, credit card authorization is done by signature, which some customers find unsafe, especially as many merchants do not cross-check the signatures and stolen cards can be easily hijacked.

'€œI have to admit that merchants rarely check [signatures], probably because people trust each other here. So PIN authorization is a good idea, especially for online shopping [...] as e-commerce is getting more popular,'€ said Claude Hutasoit, a self-made entrepreneur whose businesses use online transactions on a daily basis.

The multibillion dollar e-commerce market and the 15.42 million credit cards (as of June this year) circulating in the country will be affected by the new policy.

The number of credit cards has risen by over 20 percent in recent years, from 12.2 million in 2009 to 15.1 million in 2013. Transactions involving credit cards have also surged about 65 percent during the same period, to Rp 219 trillion last year from Rp 132.6 trillion in 2009, according to data from the Indonesian Credit Card Association (AKKI).

That data reflects a strong demand for credit cards as a payment tool in Southeast Asia'€™s largest economy, as steady economic growth in recent years has boosted purchasing power among citizens.

BI has been routinely informing the public to set up PIN numbers on their credit cards, as the central bank'€™s regulation will require customers to use the six-digit PINs starting the beginning of next year. But though some banks have strived to inform their customers of the change in policy, many customers remain uninformed.

'€œMore authorization makes customers feel more secure,'€ said Muhammad Hanri, a customer of a state-owned bank who recently learned about the new regulation after filing a complaint with a customer service representative.

AKKI general manager Steve Martha said spreading the news about the new credit card authorization mechanism would be more effective once banks had completed all necessary preparations, including the acquisition of new equipment. Otherwise, he said, customers tended to forget.

'€œElectronic data capture [EDC] machines need additional applications and installing new software requires more time,'€ Steve told The Jakarta Post, adding that there were still several banks who remained unprepared to implement the new authorization system.

'€œBut it'€™s been clear by BI that there won'€™t be additional [transition] time. If banks can'€™t comply, they should terminate their EDC machines until they can comply,'€ he said.

Steve added that various efforts to increase security for credit cards would not completely eliminate the potential for crimes, but past experiences had shown the threat of fraud to be decreasing. '€œWe want to ensure that fraud perpetrated by criminals against cardholders is minimized,'€ he added.

'€œLost and stolen'€ is the designation used to describe the kind of credit-card crime targeted by the new PIN authorization system. Currently, credit card thieves can use stolen cards shortly after obtaining them because of the deficiencies in the signature-authorization system.

'€œWe still try to counter '€˜lost and stolen'€™ crime, which is the most difficult one to combat because it is different from regular skimming or hacking,'€ Steve said. (gda)