BSP to phase out magnetic stripe cards by June

Bank South Pacific [BSP] Financial Group Limited will fully deactivate all magnetic stripe cards by the end of June as part of a major security overhaul to combat card cloning.

The country’s largest commercial bank is urging customers still using the older cards to upgrade to the Kundu Chip card, which offers enhanced encryption and fraud protection.

The move comes as BSP continues to receive reports of sophisticated card cloning despite previous attempts to mitigate the issue. While the magnetic stripe cards remain functional until the June deadline, the bank has categorized the transition to chip technology as a critical measure for fund security.

Addressing recent public concerns, BSP clarified that the reduction of daily ATM and EFTPOS transaction limits from K1,000 down to K500, is not a fee-related strategy. Instead, the bank stated the lower limits are a deliberate safeguard to minimize potential losses for customers in the event of unauthorized card access.

“The steps taken to reduce daily transactions have nothing to do with fees, but are a measure taken to better protect customer funds,” BSP confirmed to NBC News.

In contrast to the restricted limits on older cards, the BSP Kundu Chip cards offer significantly higher flexibility and security. The chip-enabled cards typically feature a combined daily transaction limit of up to K10,000, allowing for K5,000 via EFTPOS and K2,000 for ATM withdrawals.

This security transition mirrors global banking standards and is being adopted by other commercial banks in Papua New Guinea to protect the integrity of the national financial system.

To manage the surge in card-related queries and upgrades, BSP recently established a dedicated Card Centre in Port Moresby. The bank has confirmed plans to launch similar centers in Lae and Mount Hagen shortly to assist its large customer base in the Momase and Highlands regions.