Debit card ban revoked for 3 months

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Debit card ban revoked for 3 months

Korea’s financial watchdog said debit cards with magnetic stripes will be accepted again at ATMs starting today, in response to mounting customer complaints since such cards were barred from use at ATMs during business hours last Friday.

The Financial Supervisory Service said in a statement yesterday that it is delaying the ban on magnetic-stripe cards at ATMs to June 1. They will be phased out completely by September, it added.

As part of financial regulators’ plan to gradually replace less-secure magnetic-stripe cards with integrated circuit (IC) cards, which are recognizable by their gold-colored chip, the watchdog said that banks and credit card companies were insufficiently prepared for the move.

Last Friday, the FSS banned the usage of such debit cards at some 86,000 ATMs during business hours.

But many customers remained uninformed about the ban and rushed bank branches to complain, while those that wanted to switch to a new IC card had to wait up to three weeks.

“Some financial companies failed to preemptively inform customers, and did not have enough IC card inventory to replace customers’ cards,” said an FSS official.

“We have postponed the ban by three months to minimize customer inconvenience.”

The FSS said it will push banks and credit card companies to encourage customers to switch to IC cards during the interim.

It plans to conduct a special investigation in May to check how many customers at each financial company have made the transition.

By Lee Jung-yoon []

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