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Korea to move to chip-only cards for ATM transactions

09 March 2015  |  5883 views  |  0 atm

The Korean banking industry is to block the use of mag-stripe plastic cards in all of the country's cash machines from May.

Announcing the policy, the Financial Supervisory Service cited the need for "enhanced security and fraud prevention" at the country's cash machines.

The phased switch to a chip-card only policy started last week, following a successful trial of smart cards for cash advances and credit card loans at ATMs.

The FSS states that fully 99.1% of the cards in circulation now carry an integrated circuit chip. It is advising customers who are still holding mag-stripe cards to contact their bank for a replacement.

The full switch over will be completed by the end of May, with banks being required to maintain at least one mag-stripe accessible machine at branches until that date.

The European Central Bank in 2011 called for all cards issued in the single euro payments area to only use chips, not mag-stripes, as an effective means of fraud prevention, although an official ATM policy has yet to be formally introduced.

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