Activate credit cards before travel

SINGAPORE - Planning to travel? Remember to activate your credit or debit card before leaving Singapore.

The Association of Banks (ABS) said that all 10 card-issuing banks here will deactivate the magnetic stripes on credit and debit cards by Oct 1. The stripes on all newly issued cards will also be inactive by default.

This is a new security measure to safeguard card users' account details and to prevent lost or stolen cards from being cloned by "skimming" syndicates, said ABS' director Ong-Ang Ai Boon.

In the European Union for instance, it has been estimated that organised crime groups derive more than $1.5 billion euros (S$2.5 billion) a year from payment card fraud. But the new feature also means that customers will have to activate each card they plan to use abroad.

The methods vary from bank to bank, and may include SMS, ATMs and phone hotlines. Some give cardholders the option to activate the stripe for a limited time, while others require customers to deactivate them again after the travel period.

Local transactions will not be affected. This is because all credit and debit card payments here are processed using embedded EMV chips, which are said to be more secure.

But merchants in the United States and South Korea still rely on the magnetic stripes. Not all retailers in Britain, Europe, Malaysia, Australia and Japan accept cards with EMV chips.

When contacted, credit card giants American Express, Visa and MasterCard said they supported the move. HSBC will be deactivating the magnetic stripes on its credit and debit cards issued in Singapore by the end of next month. DBS Bank will do so on Sept 22.

United Overseas Bank, Maybank and Citibank will deactivate them by Oct 1, and will inform their customers of the change through their bank statements and on their websites soon.

But after the move was announced on Monday, several banks have said they will not deactivate the magnetic stripes on local credit and debit cards that have been used overseas at least once in the past year.

But it is understood that the new rule to reduce fraud, which consumers have criticised for its inconvenience, will still hit most users here.

Mrs Ong said banks may exempt frequent travellers and those who are residing overseas.

Five of the 10 card-issuing banks said on Tuesday that they will not deactivate local cards that were used overseas at least once in the past year.

A sixth bank told The Straits Times it would exempt cards that had been used overseas at least once in the past six months.

All the six banks will be sending letters to exempted customers, giving them the option of deactivating their cards.

These exemptions were allowed as banks were concerned about inconveniencing customers who live overseas or travel often, said Mrs Ong. But she reiterated the need for the new rule, adding: "It was a collective decision taken for the good for the financial sector and for consumers.

"Security and protection have never been convenient."

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