Chip-based Bankcard to replace ATM cards; RM8 annual fee applies

[jeffooi]

<font size="+1">Chip-based Bankcard to replace ATM cards; RM8 annual fee...</font>


THE STAR
Tuesday, November 12, 2002

RM8 annual fee for ATM convenience
By M.KRISHNAMOORTHY

KUALA LUMPUR: More than 11 million ATM cardholders will have to switch to the new Bankcard next year and pay an annual fee of RM8 for each card.

To be issued in the first quarter of 2003, the new Payment Multipurpose Card Card is chip-based with multiple payment applications, unlike the present magnetic strip ATM card.

Apart from normal ATM transactions, the Bankcard can also be used for electronic cash payment via either e-Debit or e-Purse. This will enable cardholders to pay for their purchases at participating retailers.

Chairman of Malaysian Electronic Payment System (MEPS), Datuk Amirsham A. Aziz, said yesterday that all ATM cardholders were expected to convert to the Bankcard by April.

“The Bankcard offers better security and has higher data and information storage capacity,” he said.

“Arrangements have been made to ensure that existing cardholders will be able to change their cards with as little hassle as possible. In the meantime, cardholders may continue to use their current ATM cards for transactions until further notice from their banks.”

Apart from the annual fee, customers will still have to pay RM1 for each inter-bank withdrawal through the Bankcard.

FULL STORY:
http://thestar.com.my/news/story.asp?file=/2002/11/12/nation/mubankc&sec=nation

[CH]

“The Bankcard offers better security and has higher data and information storage capacity,” he said.


... and if you lost your card with the PIN, then you will be in the worse boat ...

[jeffooi]

THE STAR
Wednesday, November 13, 2002

<FONT SIZE="+1">RM8 Bankcard fee under fire</FONT>
By M. KRISHNAMOORTHY

KUALA LUMPUR: Consumer organisations here are upset over a move by financial institutions to charge an annual fee of RM8 for the new Bankcard which will replace the ATM card now issued to account holders free-of-charge.

“With one swipe, financial institutions will rake in at least RM88 million in annual fees as there are over 11 million customers in the country,” said Federation of Malaysian Consumers Association (Fomca) president Datuk Hamdan Adnan who described the fee as a burden to consumers.

“The annual fee is unfair as ATM cards are currently issued free and banks should not charge their customers for the Bankcard. They are already making money by imposing other charges such as RM1 for each inter bank transfer or withdrawal,” Hamdan noted.

...Education and Research Association for Consumers secretary-general T. Indrani said that financial institutions were finding “ingenious ways” to burden consumers.

“If they are improving security, they should not charge the consumer because security is their responsibility. Banks are service providers and should ensure all their systems are in place,” he said.


FULL STORY:
http://www.thestar.com.my/news/story.asp?file=/2002/11/13/nation/mucharge&sec=nation

[joker2107]

fomca missed out the fact that atm and cash deposit machines are essential bank operation tools if banks want to reduce their work force and improve service. citibank is so cocky and arrogant that they boldly declare transactions which can be done through atms and cdms to be no longer available over the counter. will local banks then follow suit and charge customers for withdrawing their own money? look at financial results of banks released in recent times. they are eons ahead of almost all other businesses and industries. and in this so called very trying times and very competitive environment and when so many bad loans are still outstanding and loans growth is not impressive and interest rates are low blah blah blah. do they really need the pittance rm8 from the security guard who earns a handful of hundreds a month and who regularly change employers in search for the few extra ringgit - each time they move they will probably have to open a new account with another bank and there goes another rm8. besides, if it is truly smart card tech, why must each bank issue its own plastic? there's already a meps - can't they can act as a consolidation and issuing house to harness the full potential of smart card tech?

[xweird]

What I don't understand is the need for an annual fee. Current ATM cards are issued FOC, now they added in the MEPS cash thingy and the e-debit (debit card), and expect everyone to pay RM8/year. While this amount is much less than credit card annual fee, ATM cards are a necessity more than a convenience (opposed to credit cards). The need to enhance security is there, but the charges associated with it should not be borne by the consumers. Banks have the responsibility to ensure that the people's money is properly treated and safely kept. This is the trust we have put with the Bank authorities.

Please keep ATM cards as they are: the cards we use at ATMs to do our banking transactions. Change them into the smart cards if you wish, but do not charge consumers! Your return on investment/breakeven point will be delayed, no doubt, but this is the kind of CAPEX you have to spend in order to keep your customers.

If you wish to, issue another card that has the e-debit and MEPS cash thingies as an option to consumers who wish to have this convenience.

[jeffooi]

joker2107 says:

citibank is so cocky and arrogant that they boldly declare transactions which can be done through atms and cdms to be no longer available over the counter.
I can't agree more, and I repeat:
<font size="+1">Citibank is cocky and arrogant.</font>

[CH]

Jeff says,


joker2107 says:

quote:
--------------------------------------------------------------------------------
citibank is so cocky and arrogant that they boldly declare transactions which can be done through atms and cdms to be no longer available over the counter.
--------------------------------------------------------------------------------


I can't agree more, and I repeat:
Citibank is cocky and arrogant.

Please double confirm to add another candidate to the list.

HSBC - they did not put up the CITIBANK statement, but I remember that they say transactions over the counter will subject to service charge for saving account passbook holders.

Cannot recall the details, but when I read on the banner, I was so glad that I did not have a saving account with them.

[luke]

As a consumer, I think that the charge of RM8 anually is too much. We did not ask for IT but it was initiated by the banks(MEPS commitee) and we are "FORCED" to pay for it?
Altho' this is a very very good idea... BUT !!!!!

:D

[jeffooi]

THE STAR Technology
Friday, November 15, 2002

<font size="+1">Bankcard upgrades cost dumped on users</font>
By RASLAN SHARIF

PETALING JAYA: Local financial institutions are putting in new infrastructure to enable the use of the new Bankcard; the cost of which is being passed down to users who are going to pay for it every year.

Malaysian Electronic Payment System Sdn Bhd (MEPS) says that the RM8 annual fee to be levied on Bankcard users was to “cover the costs involved” in setting up the necessary infrastructure, as well as for the smartcard itself.

“The charges are mainly to cover the costs involved for the chip embedded in the card, upgrading of all ATM machines nationwide, host systems and peripherals to enable chip-based transactions,” it said in a written reply to queries.

These costs include the necessary work “to allow the uploading of the e-Purse monetary value stored in the chip” and for “purchase terminals” for the Bankcard’s e-Debit feature.

The RM8 fee is already being questioned by many ATM users and consumer groups. The justification given for charging a recurring annual fee to cover the costs of what is largely a one-off upgrade exercise looks set to add fuel to the fire.

Last week, Federation of Malaysian Consumer Association’s (Fomca) president Datuk Hamdan Adnan said that “with one sweep, financial institutions will rake in at least RM88mil in annual fees as there are over 11 million customers in the country.”

Although there are 11 million ATM cards in circulation, the actual number of cardholders is thought to be less, as many people have more than one ATM card.

This would mean that some ATM users would end up paying more than RM8 a year if they wanted to continue to have ATM access to all of their accounts in different banks, as they would have to get a Bankcard for each.

While MEPS said that the fee was imposed to cover costs and “not add to the banks’ revenue”, a simple calculation – like Hamdan’s estimation of total annual fees – shows that local financial institutions stand to rake in a substantial amount as long as the Bankcard is in use.

The traditional magnetic stripe ATM card has been in use for at least 20 years in the country, and observers point out that if the Bankcard was to last half as long and the number of cards issued remained unchanged, the amount collected would come to a huge RM880mil – if the fee remained unchanged over that time.

“Are the upgrades costing that much?” asked ATM user Rozaidi Sharif.

Others have questioned why users should be made to pay for enabling the use of the Bankcard’s e-Debit and e-Purse features, which they say should be optional on a card that would largely be used for its ATM functions.

...The Bankcard is the latest incarnation of the Payment Multipurpose Card (PMPC), one of two smartcards – the other being MyKad – under the Multimedia Super Corridor National Multipurpose Card Flagship Application.

The PMPC project was kicked off in 1998 by MEPS, a consortium owned by local financial institutions...

...The Government plans to merge the Bankcard and MyKad into a single multipurpose smartcard, but no deadline has been announced.

The MyKad users currently have the option of activating the card’s ATM feature for one bank account. They will still have to pay the RM8 annual fee. For other bank accounts, MyKad users would need to apply for a Bankcard – for each account in a different bank – in order to be able to use the ATM to access those accounts.


FULL STORY:

[jeffooi]

THE STAR Technology
Friday, November 15, 2002

<font size="+1">Bankcard upgrades cost dumped on users</font>
By RASLAN SHARIF

PETALING JAYA: Local financial institutions are putting in new infrastructure to enable the use of the new Bankcard; the cost of which is being passed down to users who are going to pay for it every year.

Malaysian Electronic Payment System Sdn Bhd (MEPS) says that the RM8 annual fee to be levied on Bankcard users was to “cover the costs involved” in setting up the necessary infrastructure, as well as for the smartcard itself.

“The charges are mainly to cover the costs involved for the chip embedded in the card, upgrading of all ATM machines nationwide, host systems and peripherals to enable chip-based transactions,” it said in a written reply to queries.

These costs include the necessary work “to allow the uploading of the e-Purse monetary value stored in the chip” and for “purchase terminals” for the Bankcard’s e-Debit feature.

The RM8 fee is already being questioned by many ATM users and consumer groups. The justification given for charging a recurring annual fee to cover the costs of what is largely a one-off upgrade exercise looks set to add fuel to the fire.

Last week, Federation of Malaysian Consumer Association’s (Fomca) president Datuk Hamdan Adnan said that “with one sweep, financial institutions will rake in at least RM88mil in annual fees as there are over 11 million customers in the country.”

Although there are 11 million ATM cards in circulation, the actual number of cardholders is thought to be less, as many people have more than one ATM card.

This would mean that some ATM users would end up paying more than RM8 a year if they wanted to continue to have ATM access to all of their accounts in different banks, as they would have to get a Bankcard for each.

While MEPS said that the fee was imposed to cover costs and “not add to the banks’ revenue”, a simple calculation – like Hamdan’s estimation of total annual fees – shows that local financial institutions stand to rake in a substantial amount as long as the Bankcard is in use.

The traditional magnetic stripe ATM card has been in use for at least 20 years in the country, and observers point out that if the Bankcard was to last half as long and the number of cards issued remained unchanged, the amount collected would come to a huge RM880mil – if the fee remained unchanged over that time.

“Are the upgrades costing that much?” asked ATM user Rozaidi Sharif.

Others have questioned why users should be made to pay for enabling the use of the Bankcard’s e-Debit and e-Purse features, which they say should be optional on a card that would largely be used for its ATM functions.

...The Bankcard is the latest incarnation of the Payment Multipurpose Card (PMPC), one of two smartcards – the other being MyKad – under the Multimedia Super Corridor National Multipurpose Card Flagship Application.

The PMPC project was kicked off in 1998 by MEPS, a consortium owned by local financial institutions...

...The Government plans to merge the Bankcard and MyKad into a single multipurpose smartcard, but no deadline has been announced.

The MyKad users currently have the option of activating the card’s ATM feature for one bank account. They will still have to pay the RM8 annual fee. For other bank accounts, MyKad users would need to apply for a Bankcard – for each account in a different bank – in order to be able to use the ATM to access those accounts.


FULL STORY:
http://star-techcentral.com/tech/story.asp?file=/2002/11/15/technology/15bcard&sec=technology

[edteam]

THE STAR
Wednesday, November 20, 2002

<FONT SIZE="+1">RM8 annual fee ‘not revenue for banks’</FONT>

KUALA LUMPUR: Malaysian Electronic Payment System Sdn Bhd (MEPS) said the RM8 annual fee charged for its Bankcard will not be revenue for banks, but was a “small contribution” to the investment involved in providing the facility.

Its managing director Datuk Mohd Hata Robani said in a statement that the amount of money spent on issuing the Bankcard was significant, with each bank putting in between RM7mil and RM40mil to upgrade its automatic teller machines (ATMs) and network infrastructure to use the chip-based card.

He said the fee largely went towards building stronger security in the chip.

“The fee will also offset part of the other major costs associated with developing the infrastructure, such as upgrading more than 3,700 ATMs.

...He said the Bankcard would be accepted in most sectors such as retail and petrol outlets, as well as closed communities like universities.

It would be made available in phases for payments at vending machines, mass transit stations, parking facilities, toll booths and payphones.


FULL STORY:
http://www.thestar.com.my/news/story.asp?file=/2002/11/20/nation/lrbank19&sec=nation

[jericho]

Once these chip based ATM bankcard replaced the conventional magnetic striped ATM card, we will lose the flexibility of withdrawing money at ATMs oversea. And on top of that we have to fork out RM8 for it.

What a joke!

[xweird]

So when they have finished their "upgrading" exercise, will their annual collection of RM8/year still continue?

[CH]

Are You Joking ?

There will be upgrades after upgrades because the security is never 100 percent secure and hackers are out to exploit those weakness and thus, you will have to patch and pacth, upgrade and upgrade, as the nature of the software evolved.

That is the reason for magnectic stripes being replaced by the chip based card, in the first place.

What we can do as a consumer may be just to keep on preasure the banks to charge it as a one off fee instead of make it as an annual fee.:mad:

[jeffooi]

THE STAR
Thursday, November 28, 2002

<FONT SIZE="+1">Banks allowed to charge RM8</FONT>

KUALA LUMPUR: Banks are allowed to charge account holders up to RM8 in annual fees for the MEPS bank card, Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz said.

“It is up to each individual institution,” she told reporters yesterday.

The MEPS chip-based bank card is scheduled to replace the MEPS card next year. Consumer groups have protested against the levy.


SOURCE:
http://www.thestar.com.my/news/story.asp?file=/2002/11/28/nation/28bk8ml&sec=nation

[Voter]

All banks are already making huge "obsene" profit, and now they want to vharge $8 for each bankcard. They say is to recover the cost. This means they wish to do business without capital. I thought only robbers do that : business without capital? So do we equate Banks = Robbers ?

[edteam]

BERNAMA.COM
November 28 , 2002 21:36PM

Bank Negara Urged To Reconsider RM8 Charge On Cardholders

KUALA LUMPUR, Nov 28 (Bernama) -- The Bank Negara has been urged to reconsider its decision to allow banks to charge the Malaysian Electronic Payment System (MEPS) bank card holders an annual fee of RM8.

The MEPS chip-based bank card is scheduled to replace the automatic teller machine (ATM) cards next year.

The president of the Federation of Malaysian Consumer Associations (Fomca), Profesor Hamdan Adnan, when contacted Thursday, said: "By allowing them to charge Bank Negara has sided with the banks and not with the consumers."

He also said the RM8 charge was unfair as the banks already enjoyed savings, by cutting costs on manpower and office space, when they introduced the ATM.

"I do not understand why consumers should bear the cost of security, which has traditionally been the responsibility of the banks," he said.

Bank Negara Governor Tan Sri Dr Zeti Akhtar Aziz yesterday said that it was up to individual banks to decide on the RM8 annual fee charge for MEPS bank card holders.


SOURCE:
http://www.bernama.com/B2002/news.shtml?general/ge2811_29

[Roy883]

Why is it an annual charge and not a once-off charge???

Why is it that Bank Negara cannot see that this is a case of 'robbing' the Nation? ATMs were indeed introduced to lessen the load of the human bank teller. As more and more people became aware of the usage/safety of ATMs, the numbers increased. Internet banking is going through this evolution as well.

So, when the banks are faced with a security challenge, it is upon them to find ways to improve their security systems.

Think about it, if a bank say, decided to put holograms on the card for security reasons, do they go around charging the user for it???? So why the exception? And on top of it, an annual fee!! Do they need to service or polish the smart card yearly??