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(Bloomberg) |
Financial consumers will be banned from using credit cards that rely solely on magnetic strips starting from September.
The Financial Supervisory Service said Tuesday that consumers are required to replace their magnetic cards with integrated circuit cards by September.
In its unveiling of the 2012 regulatory policies, the FSS said its move is aimed at preventing fraudulent financial transactions amid a series of crimes with stolen credit cards.
“Some transactions via the magnetic strip cards will be restricted from March,” the FSS said in a statement.
The usage of magnetic strip cards will totally be phased out from September, it said. “Consumers should hold IC cards for their continuous transactions via automated teller machines and settlement services.”
In addition, commercial banks will be required to install new cash machines or readjust the programs for existing ones.
An FSS official said the decision comes at a time when card scams and data theft are becoming an increasing problem for the country.
The chipless magnetic cards have been getting much of the blame for creating security holes, which thieves sneak in to steal money from bank accounts by intercepting the data from the magnetic stripes.
Though the IC card was introduced in the local market in 2003, more than 20 million magnetic strip cards are still being used in the market.
For a new regulatory policy for this year, the FSS said it plans to induce banks to refrain from excessive expansion of foreign currency assets.
The financial regulator said it would step up supervision of local banks’ foreign liquidity until risks over the ongoing eurozone debt crisis subside.
“There have been signs of recovery in the eurozone but, until Europe’s debt problem is resolved, the regulator plans to keep up its strict liquidity management and may consider such factors when evaluating banks,” it said.
Meanwhile, the Financial Services Commission said it would restrict transactions totaling 3 million won ($2,700) or more.
The move is designed to take countermeasures against the “voice phishing” scams, said the FSC, the decision-making panel of the FSS.
Financial consumers will be allowed to withdraw money transfers worth 30 million or more via the ATMs at least in 10 minutes.
By Kim Yon-se (
kys@heraldcorp.com)
