South Korea ups its payment game
The mobile payments industry in South Korea will receive a rather welcome boost thanks to local credit card companies helping small merchants gain access to EMV terminals by 2015.
The initiative was announced by the Financial Supervisory Service in South Korea on Friday, explaining how it’ll help over 650,000 ‘mom-and-pop’ stores pay for the terminals.
According to The Korea Times, companies such as Shinhan Card, KB Kookmin Card, and NH NongHyup card will contribute to 300 billion won ($290 million) to replace all mag-stripe card readers at stores across the country. Larger shops are also expected to use these new readers from Q4 2014, meaning they have to make the switch over quickly.
“If a customer pays his or her purchase with a credit card at a supermarket which [sic] uses the point-of-sale (POS) terminal for settlement via a strip reader, it is very vulnerable to hackers,” a FSS official said.
The move has come in the wake of a December card fraud debacle that saw hackers make off with 3.2 million credit card transactions, selling off information of 205,000 cardholders in the process. It was detailed information too, holding data on names, telephone numbers, credit card numbers, expiration dates, and associated passwords.
Naturally, you’d want to beef up your nation’s payments security after such an event. Therefore, the FSS and Credit Finance Association of Korea also want all credit card companies to upgrade their fraud detection systems alongside the changeover to ENVY terminals. If a company spots any possible leak, then the FSS needs to know right away.
“The financial authorities will ask card companies to offer free text messaging services to card users for settlements worth more than 50,000 won as early as May,” a CREFIA official said. At the moment, cardholders pay around 300 won per month to make use of the service.
It’ll be interesting to see how easily and effectively this new service is rolled out across the region. Perhaps it’s a model worth watching for the US who desperately need to upgrade their payments systems from the archaic mag-stripe.
[Image: Emmanuel Dyan - Flickr]