KUALA LUMPUR: Bank Negara Malaysia (BNM) says it will reserve the right to take action if individual banks are unable to validate the PIN-and-pay mechanism for payment cards by the end of 2016.

“To the extent that the bank has not made sufficient effort, we will review each bank on an individual basis,” said Tan Nyat Chuan, director of the payment systems policy department at the central bank.

BNM has targeted for all credit and debit cards to be pin-enabled by Dec 31 this year, he told a media briefing yesterday on the migration to PIN-based payment cards.

“On the part of the regulator, we’ve given sufficient notice to the industry,” Tan said, adding that the onus is now on the banks to manage the transition for both their merchants and cardholders.

As at September, some 307,000 terminals or 38% have been replaced, with a 100% replacement rate targeted for the end of the year, Tan said.

“Some acquiring banks have enabled all of their terminals, while others are making progress. But merchants still have to be trained to handle [the new terminals],” he said.

Maybank executive vice president B Ravintharan, who is the bank’s head of cards, wealth and payments, said the local banking giant has already engaged both its merchants and cardholders.

“We have extended our operating hours and will be opening 30 kiosks [where customers can exchange their debit cards],” he said.

Meanwhile, RM455 million has been allocated by the payment card industry via a market development fund for the expansion of point-of-sale (POS) terminals.

The fund is an initiative by MasterCard and Visa via merchant banks, and is in line with BNM’s initiative to increase the number of terminals to 800,000, or 25 terminals for every 1,000 inhabitants by 2020.

BNM has urged the public to replace their signature-based debit, credit, prepaid and charge cards with pin-based payment cards by Jan 1 next year as the central bank plans to phase out signature-based cards by July next year.

Meanwhile, regarding the safety of the contactless EMV chip payment cards which allow cardholders to make low-value purchases without entering their PIN or signing, Ravintharan, who is also chairman of the National Cards Group, reassured the public that electronic pickpocketing was not as easy as reports suggest.

He allayed fears by citing the need for a 4cm physical proximity between the card and the terminal to complete a transaction