BoI requires switch to smart credit cards

Israel's banks and credit card companies must switch to the EMV security standard within 3.5 years.

The Bank of Israel has caught up with Europe and the US in credit cards. Supervisor of Banks David Zaken has ordered the banks and credit card companies to switch customers to credit cards with the EMV security standard within 3.5 years. These are credit cards which use a chip for identification, instead of a magnetic strip.

The switch to smart credit cards will reportedly involve many complex changes, from the issue of cards, through adapting or replacing ATMs and terminals at businesses to use the smart cards, to the clearing system. The banks estimate the cost of the switch to smart credit cards at tens of millions of dollars or more.

The Bank of Israel says that the switch is intended to reduce credit card fraud and to remove current restrictions on the use of Israeli credit cards in other countries that have switched to smart cards. Foreign studies have found a plunge in fraud in countries which have switched to chip-based credit cards. As a result, criminals are turning their efforts to countries that still use magnetic strip-based credit cards.

The switch to smart credit cards took place in Europe several years ago, and the US decided to make the switch two years ago.

Published by Globes [online], Israel business news - www.globes-online.com - on August 20, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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