Hong Kong Enhances Security of ATM Services

January 30, 2013 Posted by China Briefing Reading Time: 3 minutes

Jan. 30 – In an effort to enhance the security of using ATM services in the region, the Hong Kong Monetary Authority (HKMA) announced that, with effect from March 1, 2013, the overseas ATM cash withdrawal capabilities for all ATM cards (including debit cards and credit cards) issued by authorized institutions in Hong Kong will be pre-set as “deactivated.”

According to the HKMA, the new measure aims to prevent fraudulent parties from withdrawing cash from a cardholder’s account from ATMs outside Hong Kong by using counterfeit magnetic-strip cards created from the data obtained by card skimming. Recently, fraudsters have been able to capture data stored on the magnetic strips of ATM cards by attaching reading devices to ATMs and have also been obtaining personal identification numbers through hidden cameras. With the stolen information, scam artists can then produce counterfeit cards to withdraw money from an individual’s bank account through an ATM.

Given this new security feature, cardholders who intend to withdraw cash from ATMs outside of Hong Kong should activate their card’s overseas cash withdrawal capability in advance though channels such as ATMs within Hong Kong, online banking, phone banking or bank branches as provided by the relevant card-issuing banks. When activating this function, individuals are recommended to specify the effective and expiration date for the period spent outside of Hong Kong, and to set an overseas ATM cash withdrawal limit which is lower than the local withdrawal limit.

Deputy Chief Executive of the HKMA Arthur Yuen said that the new control measures on the use of ATM services outside of Hong Kong can further strengthen the overall security of ATM services in Hong Kong and the HKMA will continue to work with the banking industry to strengthen the security of ATM services.

Moreover, the banking industry in Hong Kong is now implementing the chip-based ATM technology to further strengthen the security of ATM services. Authorized institutions in the region offering ATM services are expected to upgrade their ATM terminals by the end of February 2013 to support chip-based authentication. It is said that the chip-based ATM cards are able to offer greater security and protection to the sensitive data stored within the chip and therefore boost the security of current ATM platforms. The authorized institutions concerned are also expected to complete the card replacement process by phases between 2014 and 2015.

“Although ATM fraud is not a significant fraud in Hong Kong in the past years, it is important for Hong Kong to stay at the forefront of the technology and be in line with international trend,” said Yuen.

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