TAIWAN - If local banks adopt integrated circuit (IC) cards, which combine cash withdrawal, credit, cash advances and smart debit features on one card, it will be easier for Taiwanese consumers to connect to future international standards, according to a report in the Taipei Times.
Stony Yen, president of GemFor Tech Co., a veteran in the financial application system industry, said banks would need to spend up to NT$15 billion (U.S. $430 million) on converting the current ATM card system, including cards, ATMs and host computer systems, from magnetic strip to chip.
In a bid to resolve the increasingly severe problems of card fraud in Taiwan, the Ministry of Finance (MOF) ruled in October that the more than 600 million magnetic cards currently in circulation must be converted into more secure chip-based cards by next June.
(See related stories Some Taiwan banks may not meet accelerated ATM card conversion deadline, ATM fraud driving move to chip cards in Taiwan and Taiwan to begin converting ATM cards to chip in September)
International credit card issuers like Visa and MasterCard are also promoting the conversion of current magnetic credit cards into IC ones by 2006.
"Taiwan's banks would save the cost and customers' troubles by adopting a combo-card system by taking this opportunity," Yen said.
GemFor Tech last week launched its chip data preparation system (CDPS) as a platform for combination IC cards for local banks.
The MOF-funded Financial Information Service Co. said that IC cards would retain their magnetic strips for cardholders' convenience when abroad.
"The retained magnetic strip on the IC card's back will facilitate Taiwan's cardholders using IC cards for money withdrawals or transfers at overseas ATMs with Cirrus or Plus functions," said Pan Wei-chung, the company's associate manager.
However, the preservation of the magnetic strip has sparked a debate about whether the problem of data theft to produce fake cards will remain, according to the Taipei Times.
The Financial Information Service, which was set up to oversee the automation of banking services, has urged local banks to install anti-record facilities at local ATMs in a bid to prevent the recorded information in the magnetic strip of new IC cards getting into the hands of criminals, Pan said.
"One of the practical measures to avoid such a problem is that banks do not write the information into the strips until cardholders ask for it before traveling overseas and delete the information right after they come back from abroad," GemFor's Yen said.
