Debit cards are considered by most to be a fine alternative to credit cards in that they can be used similarly without the ability to buy items on installment. The biggest difference between a credit card and a debit card is that the latter can only be used if there are funds on it.

Most banks carry ATM cards that also function as debit cards, allowing you to go shopping without taking large amounts of cash with you while being able to limit your spending to the amount in the account linked to the debit card.

One would think that because it can only be used when it has cash, it is secure to use almost anywhere. It’s not. One of the major failings of a debit card is that, should the card be compromised, the account can be completely drained within seconds in the instance of fraud. The damage is much worse if the linked account happens to be your payroll account, or if it’s your main savings account.

How debit card fraud happens

Debit card fraud usually happens in several manners, the most common of which is the use of equipment being set up within a business to steal your card’s information. This skim and clone scheme happens when your card is run through a device that sends your magnetic stripe information to your provider, then it’s run a second time to record the information to the thieves’ device while a camera records your PIN input.

Another form of information theft is through bogus machines that are placed atop the actual keypad of an ATM, allowing thieves to lift your information while making it all look like a legitimate transaction.

Altogether, the incidences of debit card and ATM fraud have cost banks more that P220 million in 2013 alone, and several incidents in 2016 have prompted the Bangko Sentral ng Pilipinas (BSP) to require banks to provide better security measures on their ATM and Debit Cards.

The security measure

To combat the more sophisticated schemes that hackers use to steal your information, the BSP is now requiring all banks to issue cards with Europay, MasterCard, and Visa or EMV Chips. This resolution is in place (as of January 2017), thereby allowing more protection for the banking system and consumers as a whole.

The EMV system is a global standard for ATM, Debit, and Credit Cards, which heavily encrypts transactions by using computer chips embedded in the card to authenticate any transaction made. Although the technology has been available for some time, its adoption comes only after other major markets have begun mass migration to the EMV system as a replacement for the magnetic stripes to carry out transactions, which were the gateway through which cardholder inform ation was previously stolen.

Among the proponents of the new security measure is the Bankers Association of the Philippines (BAP), explaining that the security measure within the EMV chip will enable cardholders to prevent fraud on their cards.
Every transaction an EMV-chipped card makes provides unique codes, making it that much harder for anyone to steal your information. It is also said that existing cardholders will not be charged for the new cards. Some banks are already actively issuing and re-issuing EMV-chipped cards, one of which is BDO.

Final thoughts

With cyberspace becoming the gateway of choice for theft, it’s becoming more important for people to secure their transactions. The BSP and BAP both recommend people to be vigilant with their cards, to keep them within sight at all times, and to observe their surroundings for anything that might be a signal of an attempt to steal their card information.

Miggy Castaneda writes about personal finance for, a financial comparison website aiming to help Filipinos save money through diligent comparisons of financial products.


Rachel Quintos

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