Customers of a bank using the Automated Teller Machine (ATM). Photo: FEMI ADEBESIN-KUTI

Most banks not ready to meet ATM switch over deadline

By Oluwaseyi Bangudu

Only a handful of Nigerian banks appear ready to meet the December 31, deadline set by the Central Bank of Nigeria (CBN) for changing the existing magnetic stripe Automated Teller Machine (ATM) cards to the required EMV (Europay MasterCard Visa) technology-backed chip and PIN cards, NEXT investigations reveal.

Intercontinental Bank Plc claims to be the first to have begun the migration about five months ago, followed by banks such as Skye Bank Plc, which began its switch over early this month. Oceanic Bank Plc, Zenith Bank Plc and others are still preparing for the switch over.

Compliance

The most recent announcement by Skye Bank, early this month, said it had begun the replacement of the magnetic stripe cards with the fraud-proof Verve Card.

In a statement issued by the bank's Head of Corporate Affairs, Kayode Akinyemi, the migration would be over a five-month period, and the new card would be issued for all new requests, expired cards and lost, stolen or damaged cards.

The statement added that new customers would be issued with the new Verve Card while old customers would be advised to go to the bank's branches to have their magnetic stripe cards replaced with a chip card.

The bank listed the benefits of the PIN and chip card over the magnetic stripe card to include maximising e-payment security through the EMV technology, fraud reduction, bigger storage capacity and the ability to manage a larger number of transactions.

"The chip technology guarantees that information stored is not accessible to unauthorised persons. Its other security features ensure that transactions across all payment channels on the Interswitch network remain secure and uncompromised."

The statement also said the bank would conclude the migration before the CBN deadline; adding that the Verve Card (Debit) PIN issuance is automated and can be received at its branches instantly.

Emeka Anaeto, spokesman for Intercontinental Bank, which has called on customers to change their ATM cards, emphasised that Intercontinental Bank was the first to launch the Verve Cards. "We started about five months ago. Other banks have just started this month. There is a huge turnover replacement. Initially, customer response was dull, but with the increase in fraud, there has been a large turnout."

An official of Oceanic Bank, who spoke under anonymity, confirmed that the bank was working towards meeting the deadline. "We are working towards the date. That is why we have delays presently. We are trying to put things in order."

Another official at Zenith Bank explained that the bank hopes to activate its Verve Cards soon.

The new card

There has been an upsurge in the cases of ATM-related fraud in the country, making customers apprehensive about the safety of their monies.

The increasingly unsafe magnetic stripe cards have proven easy to clone upon access to information from the genuine card. The card was introduced into the Nigerian economy, in August 2003, by InterSwitch Limited, the company that most offered switching services to banks at the inception of ATM e-banking in Nigeria.

The new Verve Card is a more secure e-payment card from Interswitch, having a Personal Identification Number (PIN) and chip that make use of the card by unauthorised persons impossible. The chip and PIN implement the EMV (Euro pay, Master Card, Visa), the global standard that is helping to ensure that Smart (Chip and PIN) cards, terminals and other systems can inter-operate for more secure payments.

The PIN is securely encrypted (held in a secure memory) within the chip, meaning that it is extremely difficult and time consuming for a criminal to access the PIN if a card is stolen, and they would likely destroy the card in the process.

Past deadlines

The CBN has extended the technology migration date about four times: August 2008; April 1, 2009; June 30, 2009; and now December 31, 2009.

However, in spite of the series of warnings and circulars, as well as emphasis by IT experts, many customers revealed that their banks are still issuing fresh magnetic stripe cards. There are about 30 million ATM cards that must be withdrawn on or before the 31 December deadline.

Back

Dear Reader.
While we value your feedback we may block inappropriate comment. Please feel free to respond to new comments. Note also that 234NEXT bears no responsibility for what readers post and is not liable for any form of impersonation.

Reader Comments (5)

Posted by Ugwunna Ihediwa on Jul 30 2009

It's about time we moved up to better technology. There's no reason why customers and banks should be slow to implement the change. This should help curb the growing menace of credit-card fraud, and the deadline should be strongly enforced.

Posted by Lade on Aug 01 2009

Not surprising why our banks are not taking the deadline seriously, they never prioritized issues pertaining to ATM cos is not a major source of income. They find it very easy to deny responsibilty each time a customer is defrauded through this channel. So far, there is no genuine effort by them to forestall steady loss of money by innocent users and therefore should (as a matter regulatory policy) relinquish management of these machines to specialised companies who MUST run them as a primary source of livelyhood. This i believe will ensure that what needs to be done is done.

Posted by maureen on Aug 22 2009

i think the verve card will be a big relief to the increasing fraud in the society.banks and their customers should try and implement it

Posted by Sunday umoren on Oct 28 2009

The issue of automated teller machine has been of help to so many customer like me . However though the banking system has not been able to implement substantial effort to eradicate ATM frauds thus leads to introduction of secure verve which am looking forward to see the realisation of it. ATM it brings about fast delivery and also reduce procrastination in place of cue in the banking sector.

Posted by Isaac on Nov 09 2009

"The card was introduced into the Nigerian economy, in August 2003, by InterSwitch Limited" - Thats's incoreect, my old UBA card was issued before Interswitch came to existence and does not have interswitch logo, few banks were operating ATMs and Magnetic stripe cards before interswitch, only that the process was segmented. Regarding the Chip based card, I doubt that's will in any way curb the menance in nigeria. Our systems are different in that, fraudsters don't steal your card and then read it to extract your pin, infact the old magnetic card does not even store your pin on the card, the pin is resident on the switch, that's why you can request pin change online and effected without you having the card. Nigerian fraudsters are "deceptors" and not "hackers". They will get the pin from you using their relationship with you and once you've told them, that's it. It's stored securely in your EMV, fine but a more reliable copy is stored in your brains and that's what they do. That's how they send fraud emails and sms messages to people telling them that they have won a competition or so and should send their card numbers and pin. EMV will not solve this ok. I can program microcontrollers which is the base CPU of an EMV coupled with an EEPROM segmented into 2. The frist section stores the customer's information while the last address stores a unique key used to read the card and that address can only be written to at production time, what that means is that it's difficult to clone an EMV cos each card has a unique key which cannot be altered, it's like a hash, you cannot reconfigure the key back, you can only read and match. All that said, what will solve our case is people not being gullible and releasing their card information to anyone. If you release your card number and pin to anyone, straight from interswitch site, that person can make transfers from your account to somewhere else without physically having your card. Though there some cases where people clone the old magnetic cards which EMV will solve, that's very slim... most fraudsters either have access to your card, make transfers using several online portals or connive with bank staffs to perpetuate these acts.