SBP makes digital, card transactions more secure and easier

KARACHI: The State Bank of Pakistan (SBP) has taken more steps to make digital transactions and card payments secure and easier after holding consultations with industry and other stakeholders, a statement said.

“Now the consumers will only have Europay MasterCard Visa (EMV) Chip and PIN compliant payment cards, which will be active right from the day issued to them for payments and online e-commerce services,” the SBP’s statement said.

Consumers would be able to make payments up to Rs3,000 by just tapping the card on POS machines, without the requirement of a PIN. Making loan repayments through cards would be possible too.

Consumers would also be able to lodge complaints through digital channels without the need to visit a bank branch. The SBP has directed the banks to implement all these measures by June 30, 2021.

To eliminate the risk of skimming of payment cards by fraudsters, SBP has directed that ATM and POS networks in Pakistan should only accept EMV Chip and PIN compliant payment cards in the country. The measure, aimed at further strengthening the security of digital payments and curtailing the risk of frauds, was a culmination of SBP’s efforts that started in 2016 outlining a detailed roadmap for adoption of EMV Chip and PIN standard for payment cards in Pakistan. Banks have also been directed to step-up their efforts to facilitate customers in case they face any issue while using their payment cards.

SBP has allowed those banks, who have already implemented 3-D Secure (an international standard that secures online e-commerce transactions) to now activate their customers’ payment cards for online e-commerce transactions without the need of specific requests for activation.

Earlier in 2019, SBP had directed banks to implement 3-D Secure protocol to prevent frauds in online transaction and as a result, 15 banks had adopted this international standard for securing online transactions.

The new measure would likely promote the online e-commerce ecosystem and shape consumer behaviour towards online e-commerce digital payments in the country.

To make it easier and quicker to make small payments, SBP has allowed banks to relax the requirement of entering PINs for transactions up to Rs3,000.

“Banks depending on their risk management policies may decide on the amount, which may be exempted from PIN requirement on card transactions including contactless payments.”

However, the SBP has directed banks to ensure that customers were adequately protected from undue liability arising out of misuse of this facility.

With this measure, SBP hopes to see wider adoption of card-based payment acceptance by merchants who might be reluctant to do so because of longer processing times.