24 August 2021 04:44 am Views - 425
By Shabiya Ali Ahlam
Some local banks have temporarily suspended issuing payment cards or commonly known as ATM cards to their customers, due to a supply hiccup caused by the shortage of microchips embedded in such cards globally.
While the majority of the banking and finance industry source cards locally, a number of non-banking financial institutions, including some state banks, continue to procure the product from overseas, mostly from India.
The trade body for cards and mobile payment industry, the Smart Payment Association (SPA), issued a statement recently warning that the bottlenecks that are currently hampering the production of semiconductors are trickling down to some payment card manufacturers and many are facing difficulties in securing the components needed for producing the smart cards.
The SPA highlighted that the shortage would continue for at least another year, which could be an issue for consumers.
“If the situation does not improve, there are going to be millions of cards missing and this will have a direct impact on consumers worldwide, who will not be able to get a bank card or the renewal of their bank card. Without a card, you cannot pay in store, nor online, nor withdraw cash,” said SPA President Jacques Doucerain.
The Central Bank data showed that in the first quarter of 2021, a total of 70,514 new cards were issued, which is a 2.3 percent contraction from the corresponding period in 2020.