European Central Bank calls for chip-only cards

May 16, 2011 – To cut fraud, cards issued in the single euro payments area (SEPA) should only use chips, not mag-stripes, says the European Central Bank (ECB). At a joint conference with representatives of Austria’s Oesterreichische Nationalbank (OeNB), the ECB’s Gertrude Tumpel-Gugerell stressed the importance of security within SEPA and recommended that issuers should ditch mag-stripes from cards. Tumpel-Gugerell (photo) also repeated her calls for the creation of a new European card scheme to compete with established, US-based players Visa and MasterCard.

The ECB executive board member once again took an opportunity to lament the slow migration to Sepa and call for deadlines of January 2013 for credit transfers and January 2014 for direct debits. Wolfgang Duchatczek, vice governor of the OeNB, backed Tumpel-Gugerell on chip-only cards and also confirmed the establishment of a purpose-built national clearing house, that should be operational by November and will help facilitate full migration to SEPA.

Meanwhile, The European Parliament and the Council are currently discussing the Commission’s proposal for a SEPA migration Regulation. A first decision may be expected by June.

The European Savings Banks Group (ESBG) held a press conference to explain its position and replace the intended Regulation in the context of SEPA. ESBG has complained about plans to ban interchange fees for direct debit transactions in the migration to SEPA. The association has set out its own proposals built on previous work from the European Parliament.  It wants a multilateral interchange fee with the option for payers’ payment service providers to claim a different but capped amount if they can justify such fees.

You can read the proposal here:

Download the document now – 417.8 kb (PDF File)

Source: ESBG & finextra