Korea Financial Supervisory Service has announced a complete shift to chip-only cards by the end of May rendering mag- stripe cards obsolete. The FSS is taking new measures for ‘enhanced security and fraud prevention’.
Chip & PIN technology is an established standard for safety and security for Card transactions. A Chip and PIN Card not only ensures greater security of Point-of-Sale (POS) Card transactions, but also provides enhanced protection against fraud from lost, stolen and counterfeit Cards.
Chip & PIN technology makes it difficult to duplicate or access data stored on your Card making them a much safer option.
The FSS states that fully 99.1% of the cards in circulation now carry an integrated circuit chip, Finextra reported. The phased switch to chip-cards started last week after a successful trial of smart cards for cash advances and credit card loans at ATMs.
Unlike cards that use a magnetic stripe containing a user’s account information, chip cards implement an embedded microprocessor that contains the cardholder’s information in a way that renders it invisible even if hackers grab payment data while it is in transit between merchants and banks.
The technology also generates unique information that is difficult, but not impossible, to fake. There is a cryptogram that allows banks to see if the data flow has been modified and a counter that registers each sequential time the card is used (sort of like the numbers on a check), so that a would-be fraudster would have to guess the exact historical and dynamic transaction number for the charge to be approved.
Already used in every other G20 country as a more secure payment method, chip-and-PIN cards can be found on the consumer side of a global payment system known as EMV (short for Europay, MasterCard and Visa). The system will be rolled out in the U.S. in 2015 as well. While the European Central Bank announced back in 2011 that all cards issued in single euro payments area will use only chips, however an official ATM policy hasn’t been introduced yet.
(image credit: DeclanTM)