Many domestic banks have complained about the heavy burdens placed on them by a new ruling that speeds up by six months the Ministry of Finance's (MOF) requirements to replace automatic teller machine (ATM) cards with integrated circuit (IC) cards.
"We'll do our best to meet the deadline," said a local bank offical, who did not wish to be identified beyond the surname Tsai.
"But we're also worried that some technologies to enhance the IC cards' capabilities haven't matured yet," Tsai said.
In a bid to prevent the use of fake cards, the MOF last month ruled that ATMs would have to be upgraded by next June and all magnetic cards would have to be replaced by safer IC cards by the end of next year.
Launching the new IC card by the end of next year will be a difficult task, Tsai said, as will upgrading ATMs.
He said that the difficulty with upgrading the ATMs in line with the MOF's schedule is that there may not be enough engineers available to install IC readers on the nation's 17,000 machines.
"We have the readers, but small banks like ours may have to wait in a long line for engineers to install them," Tsai said.
OFFSETTING COSTS
Tsai also said that banks are ready to invest heavily in the ATM card replacement plan.
They expect the new IC cards to be used for multiple purposes, functioning as smart cards, or superelectronic purses, to spur consumption that will offset costs associated with the changeover.
Facilitating a smart-card environment, however, will take time, money, and manpower, Tsai said.
A bank like Tsai's, with 600,000 customers, may find it difficult to meet the MOF's deadline.
Originally, changing the nation's 60 million cards over to the new system was scheduled to take five years.
Smart cards can be used not only for making withdrawals and remittances but also for making purchases in convenience stores, gas stations, department stores and movie theaters.
In addition, they can be used to make phone calls or ride public transportation.
Large banks such as Chang Hwa Bank (
An executive vice president at Chang Hwa, Hsien Chao-nan (謝昭男), said that it will be a waste of banks' money if the new IC cards are only used to make withdrawals. IC cards cost NT$35, while magnetic cards cost about NT$3 to NT$6.
COMPETITIVE MARKET
According to Hsieh, Chang Hwa will replace over 2 million ATM cards at a total cost of over NT$70 million, a cost that the bank sees as impossible to pass on to customers in today's highly competitive financial market.
"It's not fair that the public, which has often asked banks to upgrade their financial services, refuses to pay for any services," Hsieh said.
He hopes that the public will consider paying a reasonable price for services after the sector's cutthroat price competition cools down.
Using foreign countries as an example, Hsieh said that banks in few countries provide as broad a range of free services as do banks in Taiwan.
Although the Bankers' Association (銀行公會) allows banks to decide on their own whether they will charge clients for new IC cards, its secretary-general, Kuo Yu-chyi (郭玉麒), said that it is unlikely that banks will charge clients.
"It's a matter of survival," Kuo said. "If banks charge their customers for IC cards, the customers will choose other banks."
Hsieh said in addition that new IC cards may cause problems for users who travel abroad.
Travelers may find it inconvenient to use IC cards in countries where ATMs have not been upgraded to read them, he said.
Although it is generally believed that IC cards, with their multiple encryption systems, are more difficult to forge than magnetic cards, most bankers said that they can only cross their fingers and hope that would-be criminals will find no way to crack the new, expensive system.
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