Bank Indonesia has warned merchants to refrain from swiping customer's debit or credit cards through the card readers on their cash registers to prevent identity theft and fraud. (ID Photo/Emral Firdiansyah)

Central Bank Warns Merchants to Stop Double Swiping Payment Cards


SEPTEMBER 05, 2017

Jakarta. Bank Indonesia has warned merchants to refrain from swiping customer's debit or credit cards through the card readers on their cash registers to prevent identity theft and fraud.

"Bank Indonesia forbids the double-swiping practice for noncash transactions. In each transaction, cards can only be swiped once on the electronic data capture [EDC] system," Agusman, executive director of the central bank's communication department, said in a statement on Tuesday (05/09).

Merchants use this method to easily match customers' data with their payments at banks.

Despite this practicality, the central bank issued a regulation last year that prevents merchants from capturing customers' information by swiping their cards through their cash registers. The regulation, which prescribes penalties, including the revocation of lenders' permits to issue and process payment cards, forbids banks from misusing their clients' data.

The government issued the regulation in November, about three years after a case involving stolen credit card information. The victims, according to the police at the time, often used their cards at branches of The Body Shop in Jakarta and Padang, West Sumatra, which used the double-swiping method.

"The acquirer – the bank – is expected to impose strict measures, such as stopping cooperation with merchants that still perform the double-swipe practice," Agusman said.

He encouraged customers to be proactive and report incidents of this illegal practice to the central bank by dialing 131 and mentioning both the names of the merchant and the partner lender, as displayed on the EDC.