South Korea Switching To EMV Chip + PIN Only For ATM Transactions

South Korea’s Financial Supervisory Service have announced that cards that use a magnetic stripe rather than EMV chip will no longer work for cash withdrawals at ATMs. You’ll still be able to use your magnetic stripe cards to make regular purchases, but you won’t be able to use these cards to get cash out. This new rule will come into effect this Thursday, although banks will have at least one ATM which will accept magnetic stripe cards until the end of May.

This isn’t really an issue, as you’re charged a cash advance fee when you use a credit card to withdraw cash from an ATM anyway. The reason that South Korea are making this change is that because fraudsters use cash advances from ATMs as an easy way to unload cash from credit cards that have been replicated. Replicating EMV chip cards is much more difficult due to the way that EMV chips work, so this change will reduce fraud without having a massive impact on regular users.

I’m actually moving to South Korea for business for an extended period of time (don’t worry, I’ll still be blogging regularly) so I’m still unsure how this will affect me. I’m planning on using the Charles Schwab debit card to make cash withdrawals, this card has no foreign transaction fees and also refunds any international ATM surcharges as well. The card does come with an EMV chip, but the PIN function is a back up although this has always worked in ATMs before so I don’t see any reason why it wouldn’t in this case.

Not all debit cards currently come with an EMV chip, so for those travelling to South Korea they will either need to make sure they have enough cash to convert, travelers checks or a debit card that comes with an EMV chip.