NPCI – Goodbye Magnetic Stripe ATM / POS Cards
NPCI – Goodbye Magnetic Stripe
ATM / POS Cards
The demise of Magnetic Stripe ATM / POS Cards in
India is around the corner.
The
short name for of Magnetic Stripe is Magstripe card.
A
magstripe card gets its name from the magnetic stripe across the back of the
card. This “stripe” is encoded with sensitive payment card data such as the
full PAN (personal account number), expiration date, and account holder name
among other things.
The
increasing number of frauds via Magstripe ATM/POS cards necessitated the need
for safe alternate solutions.
One
of the alternate solutions, is the EMV Card.
An EMV
card contains a computer microchip that stores payment card data. The chip also
produces a unique, one-time-use cryptogram for each transaction to make it more
secure than a magstripe card.
The chip
on an EMV card is capable of much more sophisticated authentication than
magnetic-stripe cards. In other words, there is a fully operating computer
system embedded in every EMV card. The chip is tamper-proof, making the card
nearly impossible to clone.
Please
note the chip card is nearly impossible to clone, it is not 100% safe.
The
magnetic stripe contains minute magnetic particles that can be oriented in
different directions to write data onto the card. Magstripe data is static,
meaning once the data is loaded onto the magstripe, it doesn’t change. This opened
a window of opportunities for fraudsters to clone Magstripe cards and cheating the
banking industry.
Chip card
technology and EMV standards continue to evolve, even today. EMV stands for
Europay, Mastercard and Visa who joined together in the early 1990s to create
common standards that make card payments safer.
Before
EMV, each card network had independent standards. Creating common standards
makes staying safe easier for everyone—consumers, banks, card networks, payment
processors and the businesses that accept electronic payments.
Today,
EMV chip card standards are maintained by a private organization, EMVCo, which
is managed by leading card networks including American Express, Discover, JCB,
Mastercard, UnionPay and Visa.
These
standards make life easy for the end users.
Reserve
Bank of India over the years, issued multiple circulars regarding the replacement
of Magstripe cards with EMV cards
The
earliest circular issued by RBI is dated September 22, 2011 highlighting the report
of ‘WORKING GROUP ON SECURING CARD PRESENT TRANSACTIONS’ released on June 2011.
This
working group studied the benefits of EMV Cards and the rollout plans in countries
across the globe.
NPCI
NFS Department vide Cir No 27th September, 2021 informed to all
Member of National Financial Switch (NFS) that after 15th October,
2021 NPCI will start to decline all fallback transactions routed through NFS
Switch.
Fallback transactions are
transactions which cannot be completed as a EMV Chip and PIN transaction at the
ATM / Micro ATM and therefore, the transactions ‘fall back’ to magnetic transactions.
The
ISSUERS have a right to decline such ‘fallback’, transactions, to avoid fraudulent
transactions.
However,
still some ‘fallback’, transactions are getting approved and the majority of
the such ‘fallback’, transactions turn out to be fraudulent.
To
avoid such fraudulent transactions, and in view that majority of the Cards are
only EMV Cards, NPCI took the step to decline the ‘fallback’, transactions.
NFS
Members have to migrate all their ATM and Micro-ATM terminals to EMV Standards
only.
Disclaimer:
These are my personal views only. The bottom line is Safe ePayments. Nothing
More – Nothing less
Read more @
Swiping left on magnetic stripes - The magnetic stripe will start to
disappear in 2024 from Mastercard payment cards @ https://www.mastercard.com/news/perspectives/2021/magnetic-stripe/
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