The greatest challenge with the implementation of this system is the ease of changing and recovering a PIN.
A few months ago, Banco Central de Costa Rica (BCCR) announced that the signature requirement to conduct transactions greater than ₡30,000 with credit and debit cards at business payment terminals would be replaced by a PIN or secret number —a change that started to be gradually implemented as of May 1, 2022.
The national banking system has been preparing for this change for more than 5 years by boosting the implementation of contactless technology in payment devices and cards, which is essential for using PINs.
At a technological level, these changes promoted by BCCR, Evertec, and other entities involved in the card-present payment ecosystem in Costa Rica, include programming modifications in points of sales (POS) or payment terminals to safely handle PINs. This new programming deployment impacts thousands of devices in the country. The change also requires a secure web-connected technology to let issuing banks provide their cardholders with the convenience of changing their PINs when required.
”At Evertec, we have an API (Application Programming Interface) called ‘PIN assignment or change’ that gives the card a new PIN or changes it through online banking or the bank’s application, thus reducing the institutions’ operational processes and providing users with an immediate and streamlined access to their PIN,” asserted to Jimmy Solano Blanco, Evertec’s Commercial Vice President for Central America.
He added that educating cardholders and businesses is an essential part of this process. Cardholders should be provided information on where and how to request their PIN in order to avoid any setbacks when making a payment equal to or greater than 30,000 colones; while merchants should learn how to instruct their customers to enter the PIN, so that the process can be made a simple and fast experience for both parties.
Currently, for transactions greater than ₡30,000, cardholders are required to show an identity document (identity card, DIMEX, passport, or other) and to physically sign the receipt or proof of payment.
The biggest challenge with implementing this system is the ease of changing and recovering a PIN, particularly because PINs are not used as often with credit cards in Costa Rica, so many cardholders will need to recover them.
Currently, PINs are not used very often, and for Evertec, it represents less than 1% of the transactions processed in May, since the project is at the stage of deployment. On the other hand, the change will only affect people whose cards are equipped with the feature to process PINs. Financial institutions are gradually replacing cards, either due to expiration or at the request of the cardholder.
The new regulations will affect a small percentage of people and card payment transactions, since only 10% of purchases exceed the minimum amount for quick payments right now. However, all transactions may eventually be processed with this technology.
“Evertec provides the necessary solutions to comply with international and local laws and regulations, ensuring the best market practices. In this way, through a simple technological integration, and in strict compliance with BCCR‘s provisions, it is possible to simplify the PIN establishment process, both for banks and for end users,” Mr. Solano concluded.