Tetangco tells banks to address ATM, POS risks

Risks related to automated teller machines (ATMs) and point-of-sales (POS) transactions — confidentiality, system downgrade, breach of consumer information, and unclear fees and charges — must be addressed, the Bangko Sentral ng Pilipinas said Wednesday. BSP Gov. Amando Tetangco Jr. stressed this point Wednesday, noting that ATM and POS transactions totaled P11.3 billion in the first quarter. In a speech at the launching of BancNet, Expressnet, and Megalink POS network interconnection Wednesday, Tetangco said that banks and financial institutions must adopt controls, measures, and information campaigns to ensure that customers know how to use their ATM and debit cards in as safe and secure a manner as possible. "It is prudent to remember that while technology presents us with many opportunities, we must also remain vigilant of its attendant challenges and risks," the central bank chief said.

These risks, if unaddressed, "can erode public confidence in the POS system," Tetangco added. The Bangko Sentral monitored 7.4 million e-money transactions worth P11.3 billion using ATM and POS channels as of end-March. "Once this POS network interconnection is fully developed, therefore, it will provide even more efficient and cost-effective ways to serve the many bankable… yet unbanked… Filipinos," he added. The POS systems' interconnectivity would lead to improved efficiency and better services enabling customer payments, Tetangco said. Customers must know all applicable fees associated with the use of other networks’ POS terminals in accordance with existing BSP regulations on e-money and consumer protection, he added. In Circular 649, the Bangko Sentral laid down the regulatory framework for e-money and e-money issuers that promotes innovations in fund transfer mechanisms and paves the way for competitive growth in the industry. Because of the BSP circular, authorized e-money issuers may build a network of cash in or cash out agents as gateway for more consumers to access financial services. "On our part, we at the Bangko Sentral will continue to create a policy and regulatory environment that will enable innovations to flourish while ensuring that appropriate controls and safeguards are in place," Tetangco said. Bank of the Philippine Islands (BPI) introduced the POS system in the Philippines in 1987. Megalink was then established in 1993, and Bancnet in 1994. Value proposition enhanced There are around 30 million ATM cardholders — and 37,000 POS terminals in malls, restaurants, hotels, and small specialty shops — representing roughly a third of the estimated 92 million population, Tetangco said. The biggest ATM networks were interconnected in 2006 to lower the cost of transaction and make efficient banking services more accessible. "This time around, the interconnection of the POS systems of the ATM consortia should increase the touch points for client interface and enhance the value of your services to your customers. The value proposition for retailers is likewise enhanced," Tetangco said. Retailers no longer need to deploy multiple card-accepting devices, as the POS interconnection simplified such transactions and lowered the cost for consumers. Founded in 1990 to service customers of BPI and BPI Family Savings Bank, Expressnet was later tweaked to cover the state-owned Land Bank of the Philippines. Megalink has 18 institutional members and more than 10 million cardholders, while Bancnet has more than 60 member banks, subscribers, affiliates, and 9.5 million cardholders. — Illustration by Analyn Perez/LRS/VS, GMANews.TV