SCF: ECB Calls for Chip-Only Cards
- At a conference at the Austrian central bank (ÖNB), Gertrude Tumpel-Gugerell, member of the Executive Board of the ECB, called SEPA issuers to ditch magnetic stripe payment cards. She also reminded the audience that retaining mag-stripes weakens the security of this payment instrument (these cards can in fact be skimmed) and that its use has gone negligible.
- Moreover, commentators underlined that “mag-stripe only” cards could be issued for use outside the SEPA and that, if integrated in the EPC’s SEPA Cards Framework (SCF), this decision would put further pressure on the US to eventually migrate to EMV.
- The ECB seeks to convince EPC members that dropping magnetic stripe cards in the SEPA would generate profit. This stripe was already mentioned in 2010 by EPC Chairman, G. Hartsink. For now, EPC banks still think the case faces a lack of visible cost/benefit ratio. Nevertheless, recent studies demonstrate that the induced decrease in fraud-related losses would more than compensate the added issuing cost.
See April 2011 Watch