Cash cards that use magnetic strips for transactions will be partially banned at automated teller machines starting Feb. 1.
Under regulatory countermeasures to minimize financial scams including forgery of credit cards or cash cards, the Financial Supervisory Service has advised consumers to replace their magnetic cards with “integrated circuit” cards over the past year.
“As an initial step, cash transactions with magnetic-strip cards will not be available at about 50 percent of ATMs at financial firms’ branches nationwide between February and July 2013,” the FSS said in a statement Wednesday.
As an intermediate step, the regulator said, about 80 percent of ATMs will be set up to decline magnetic-strip cards from August 2013 to January 2014.
Consumers will be fully barred from using cash transactions with those cards via ATMs as of February 2014. Finally, the ban on magnetic-strip credit cards will be applied to purchasing goods at retail stores and cash advance services from January 2015.
Though the FSS had sought to completely phase out the use of magnetic-strip cards in the latter half of 2012, its policy was shifted to a gradual expansion of IC cards to prevent possible social woes.
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 magnetic card with no computer-based chip has been getting much of the blame for creating security holes, where thieves intercept data from the magnetic strips to break into beak accounts.
Though the IC card was introduced in the local market in 2003, several million magnetic-strip cards are still being used in the local market.
Over the past year, financial firms such as commercial banks, brokerage houses and insurance firms have been instructed to install new cash machines and readjust the programs for existing ones.
By Kim Yon-se (
kys@heraldcorp.com)
