Chip-integrated ATMs to thwart skimmer and scammers

Thailand’s commercial banking sector is well on track to beat the Bank of Thailand’s target deadline of December 2015 to have all ATMs in the country converted to chip-based technology.

ATM skimming fraud has proved a major problem around the world, and there are plenty of cases occurring across Thailand, leading not only to inconvenience for ATM card-holders but also losses both in monetary terms and consumer confidence for banks. ATMs which are magnetic-based are susceptible to skimming, hence the Bank of Thailand’s determination to have all 50,000 ATMs across the nation converted to a chip-integrated system by the end of 2015.

While much of the fraud is perpetrated in prominent tourist locations like Bangkok, Chiang Mai, Pattaya, and Phuket, there are also plenty of cases of fraud taking place elsewhere across the country. With skimming gangs prepared to travel across the world to countries where they are aware ATMs can be accessed with some ease, it is imperative Thailand, as a major tourist destination, takes affirmative and speedy action to make life tougher for these criminals.

The Bangkok Bank, the largest in Thailand in asset terms, has taken the lead and had converted all its ATMs to chip-integrated technology by the end of 2012. So far, it is the only major commercial bank in the country to have completed a 100 percent conversion.

According to current figures, around 30,000 ATM’s across Thailand have already been converted, equating to 60 percent, which suggests the entire process will indeed finish well ahead of the Bank of Thailand’s 2015 deadline.

It also makes long-term economic sense for the banks to embrace superior technological security systems as the costs, while borne upfront and impacting on the banks’ fiscal bottom line for a year or so, can be averaged out over a period of years and the increased security should result in significant savings in terms of reimbursement to customers who may have been defrauded.

The Bank of Thailand has stressed that the costs of upgrading to chip-integrated technology should not be passed on to consumers or ATM fees should not be raised. Equally, the central bank suggests commercial banking operations engage in educating their customers with mobile and internet banking systems so the end-user is better able to spot a potential fraud before it can take place.

Simple steps such as checking an ATM looks secure before inserting a card and using the machine should also go some way to reducing fraud.

Europe and the United States have already switched to chip-integrated ATM cards and Australia is following suit.

While the new system will make a huge difference, the security sections of the major banks are also aware that scammers and skimmers will also be looking at new ways to circumvent the technology, so vigilance remains essential.