Chips Included

(1/4/2010)

Bank Indonesia has decreed that, beginning in early 2010, all credit cards issued in Indonesia are required to contain a computer chip as an added security measure.

A regulation issued by the Bank in April 2009 mandates the use of chips. Sri Suparni, the Deputy Director of the Directorate of Payment Systems at Bank Indonesia, said: "In order to enhance security, we are widening the use of chips which offer more security than the old magnetic strips." She explained that the chips store customer information in a more secure way that is less accessible to possible fraudsters than is the case with the magnetic strip cards.

Only credit cards issued in Indonesia are affected by the new ruling. Whether ATM cards and other debit cards will eventually be included in the new ruling is still under review by the Bank.

According to Bank Indonesia, as of January 2010, 99.6% of the 10,262,331 Indonesian credit card holders have already had their old cards converted to chip-carrying cards.

This change in policy has also made necessary the replacement to Electronic Data Capture (EDC) machines capable of dealing with the new chip-enabled cards. To date, 83.78 % of the 219,000 EDC machines operating in Indonesia have been replace with machines able to facilitate the chips.

Foreign travelers carry the older magnetic strip cards may begin encountering problems using their cards in Indonesia as the "old-fashioned" magnetic strip EDC machines are phased out.