Grace period for IC card conversion could be extended

The government is likely to extend the grace period banks have to replace magnetic-strip cash-withdrawal cards with more secure integrated-circuit (IC) cards because of financial institutions' slower-than-expected progress, a government official said yesterday.

Banks are currently required to complete the replacement process by the end of this year, according to a decision made by the Bankers' Association of the ROC (銀行公會).

Inter-bank transactions with magnetic-strip cards will be annulled from Jan. 1 next year at more than 20,000 cash machines around the nation as part of the decision to promote the use of chip-embedded cards for safe financial trading.

"It is expected that banking institutions will pick up speed in the fourth quarter in issuing IC-embedded cards to their original savings-account customers," Jong Huey-jen (鍾慧貞), deputy director-general of the Bureau of Monetary Affairs, said in a telephone interview yesterday.

She said around 20 million new cards will be delivered to cardholders by the year's end, which would mean 30 percent of the more than 65.5 million magnetic cards currently in circulation will be upgraded.

"Whether we'll implement the policy to suspend inter-bank transactions for magnetic cards next year will depend on the real situation around November," she added.

Jong said the project's priority is to increase the popularity of the multi-functional IC-embedded cards to meet most consumers' needs.

According to the government-funded Financial Information Service Co (財金公司), which helps promote the card conversion project, a wide range of applications would be included in the chip, allowing cardholders to withdraw cash, transfer money, pay water, gas and telephone bills through the Internet, and even use them at gas stations in the future.

Although the conversion pro-gress falls short of expectations, more than 90 percent of the nation's cash machines have been modified to read chip-embedded cards, according to the Financial Supervisory Commission.

Cosmos Bank Taiwan (萬泰銀行) has taken the lead among new banks by starting to upgrade cash-withdrawal cards in September last year.

With all its cash machines having been modified, Cosmos has issued more than 300,000 chip-embedded cards, compared with its 2.3 million magnetic cards currently in circulation.

Fubon Commercial Bank (富邦銀行) is the only bank that is not planning to tackle the upgrades before the end of the year.

Fubon will not start converting its 550,000 cash-withdrawal cards until it formally merges with TaipeiBank (台北銀行) on Jan. 1, according to Lesley Yu (於知雯), a Fubon public relations official.