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More banks are migrating from magnetic stripe cards to the chip
and pin EMV cards (Euro pay, MasterCard, Visa), in response to the Central Bank
directive and the increase in fraudulent activities.

The Central Bank has shifted the migration date about four
times: August 2008; April 1, 2009; June 30, 2009 and December 31, 2009.

Notwithstanding, some finance experts say card holders still
have a lot of safety responsibilities despite the migration to the improved
chip and pin cards.

Intercontinental Bank was the first to introduce the chip and
pin verve cards last year and other banks, including Zenith Bank, GTB, Eco
Bank, Skye Bank, have since joined the race.

The magnetic stripe card was introduced into the Nigerian
economy, through the banks in August 2003 by InterSwitch Limited, the company
that offered card services to the banks at the inception of e-banking in
Nigeria and introduction of ATM.

The chip and pin implements the global standard that is helping
ensure Smart (Chip and PIN) cards, terminals and other systems can interoperate
for secure payments and are less prone to fraud.

The chip technology guarantees that information stored is not
accessible to unauthorized persons. The pin is encrypted (held in a secure
memory) within the chip, meaning that it is difficult and time consuming for a
criminal to access the pin if your card was stolen.

Safety is paramount

Deji Oguntonade, a staff of SugarAnt Technologies Limited, a
technology firm, and an electronic banking consultant said despite improved
technologies, card holders would always be responsible for the safety of their
cards.

“The EMV cards offer more security, but the customer is still
obliged and responsible for keeping his PIN, which is the critical factor in
the usage of the card. It’s the customers’ responsibility to protect the PIN,
and keep the cards from being stolen or lost. The security is that the cards
cannot be easily cloned as before”.

In terms of liability for the transaction as a result of using
an EMV card, the situation is very clear.

Paul Love, a technology solution consultant for ACI Worldwide, a
technology company specialised in aiding customers with large-scale smart card
projects and EMV migrations in response to enquiries says the liability burden
of an ATM discrepancy using an EMV card is clear.

“From a technology point of view the position is clear, the EMV
card and the PIN can be proven to have been used in the ATM,” Mr Love said.

“From a liability point of view, in normal circumstances the
cardholder is absolutely liable for the transaction”.

“What happens in abnormal circumstances depends on the
relationship the customer has with the bank, and the banks approach to customer
service. If a card is used after a customer has reported it stolen – the bank
should then be liable.