Beware! Magnetic-based cards won’t work after Dec

​Hyderabad: If you are gearing up for a big New Year 2019 bash and looking to pay for it using a card, better re-check your credit and debit cards and see whether they have chips, not magnetic-stripes. For all the cards with magnetic stripes will not be valid from January 1, 2019. The Reserve Bank of India (RBI) directed all the banks to replace magnetic-stripe cards – both domestic and international - with EMV chip cards by December 31, 2018, which is the final deadline. 

The apex bank embarked on this mammoth exercise way back in 2015 as EMV (Europay – MasterCard - Visa) chip and PIN-based cards provides better safety and security compared to the magnetic-stripe cards. It extended the deadline for completion of this exercise to September 2016. With banks expressing their inability to replace all the cards by that time, it set December 31, 2018 as the final deadline.     

“Though many bank customers had not applied for new EMV cards, the banks through the available database of their customers has already replaced them. Customers who haven’t received their new cards are advised to visit their home branch to replace the same with EMV chip and PIN cards before the deadline,” Surya Prakash, a senior bank official, told The Hans India.  

In last two years, banks have come across many ATM frauds and hacking of cards. This forced nationalised bank like SBI and certain private banks to block credit and debit cards to avoid false withdrawals. With advent of chip-based cards, such instances will come down, he added.   As per available data, the country is to 4.1 crore credit and 98.01 crore debit cards (till August 2018). That means it’s a monumental task for bank sector to replace such a large number of cards.      

Furthermore, ATM operators also need to recalibrate ATM machines and software for facilitating the use of EMV cards.  But, according to a cyber expert, a large number of ATMs are yet to be upgraded to handle these chip cards. 

“Unfortunately, in India ATMs are not yet upgraded with chip enabled technology. At present the ATMs are running on old magnetic stripe reading. Hence, ATM skimmers and Romanian ATM cloning fraudsters are able to continue their malpractices. Upgradation of ATM machines and the software is must to minimise ATM phishing frauds,” said Prasad Patibandla, cyber expert. 

Explaining further, he said EMV cards are smart payment cards wherein EMV denotes the developers of the chip - Europay, Mastercard, and Visa. “These chips are actual computer chip placed on the top part of a credit card to communicate with terminals. These chips allow a much more intricate and secure transaction process to occur. These chips will create dynamic data every time a user would make a transaction using them. 

In the chip card, a PIN is required at PoS (point of sale) while magnetic stripe cards do not demand a PIN. The two-factor authentication facility in these cards makes PoS transaction more secure. While the magnetic stripe card completes transaction in a single swipe on these devices,” Patibandla added.