Magnetic stripe card cash advances via ATM to end in 2015
Korean magnetic stripe credit card users are likely to be blocked from using cash advance services at automated teller machines (ATMs) starting in 2015, industry sources said Thursday.
Major credit card firms, including top player Shinhan Card Co., are planning to end cash advance services and card loans via ATMs in January 2015 following a five-month pilot period in 2014, according to the sources.
Starting next March, the companies also plan to issue and replace all new credit cards with integrated circuit (IC) cards, which are safer payment devices than magnetic stripe cards, they said.
The move comes after the financial regulator announced measures to end cash withdrawals and cash transfers using magnetic stripe cards via ATMs as part of efforts to enhance consumer protection against duplication and forgery.
Under the plan, card users will first be asked to voluntarily replace their cards. Following a pilot period, cash advances and card loans via magnetic stripe cards will be completely blocked starting on Sept. 3. Credit payments on magnetic stripe cards will be unaffected.
The regulator had first pushed for an earlier transition to IC cards but delayed the period as a rush of card replacement requests triggered consumer complaints on the first day of the pilot period.
As of end-December, IC cards accounted for 82 percent of credit cards and 100 percent of cash cards, according to the Financial Supervisory Service. (Yonhap)