To make ATM use ‘safer’, banks may charge more for transactions
New Delhi: ATM frauds have been on the rise and there is little that the RBI, or banks for that matter, have been able to do about it. Reports of people falling prey to skimming
New Delhi: ATM frauds have been on the rise and there is little that the RBI, or banks for that matter, have been able to do about it. Reports of people falling prey to skimming – card duplication – have become commonplace.
It’s not that the matter never caught the central bank’s attention at all. In May last year, RBI began attempts to start fixing the security issue and issued directions to this end to banks.
The RBI directive mandated replacement of all magnetic strip-based cards with chip-based ones with effect from September 1, 2015. However, the deadline was shifted to January 31 this year, and settled at December 31, 2018. Though some banks caught up with the mandatory provisions, the problem consumers faced was with most ATM machines which would not read such cards.
To this end, RBI on May 26 this year ordered every operator to ensure that their existing machines can process "EMV chip and PIN cards by September 30, 2017" and all the new ATMs shall be enabled for EMV chip and PIN processing from inception.
While the security measures mandated by the RBI is welcome, the move towards safer ATM transactions could come at a cost for consumers. Industry experts say that ATM transaction fees might go up, with the National Payments Corporation of India predicting an ATM upgrade bill for banks of more than Rs 1,000 cr.
NPCI CEO A P Hota told TOI, “For new ATMs, the technology upgrade might cost anywhere from Rs 5,000 to Rs 10,000 (each). For the older machines, it could go up to as high as Rs 20,000-Rs 30,000. So we are expecting it to be more than Rs 1,000 crore. But at implementation level it might even touch Rs 2,000 crore.”
The changes will obviously come as a cost to banks, who may not hesitate to transfer the burden on to the customers. Banks with larger ATM networks, which includes State Bank of India, HDFC and Axis Bank, will have to spend more on the upgrade but the charges will depend from bank to bank.