IC terminal business stopped in 90%…“while two months left until deadline”
Hwang Byung Seo | BShwang@ | 2018-05-18 11:02:36

Credit card merchants are expected to have to replace their existing magnetic handsets with highly secure IC handsets by July 20. Photo by Financial Supervisory Service

IC terminal replacement time has remained only two months, but more than 10% of all franchise stores are not replaced.

According to the credit industry on May 16, the rate of replacement of IC handsets reached 90% as of this month.

The replacement of IC handsets is due to the enactment of the Specialized Financial Services Act of 2015, and a large-scale card company information leak occurred in 2014. The government imposed the use of IC registered terminals registered with the credit finance association, and the existing unregistered terminals were replaced by July 20 to protect the credit card members` information.

Meanwhile, credit card merchants need to replace existing magnetic handsets with highly secure IC handsets by the time limit. The government will impose penalties (franchisees) and penalties (fines) for the use of unregistered handsets after passing the deadline. There is a concern about the inconvenience of operating the merchants since credit card companies can restrict card transactions through unregistered handsets. The Credit Finance Association and credit card companies are now collecting KRW 100 billion in funding to replace IC terminals and are supporting subsidy replacement costs at small merchants.

The industry has only two months to replace the terminal, but it is at odds with the replacement of the IC terminal at the office.

"Around 10% are not installed, and most of the franchisees do not feel the necessity of replacing their IC terminals because only two or three people are scratching the cards a day."

As a result, there is a prospect that 100% replacement of IC terminals will be virtually impossible. A liaison officer in the credit industry stated, "We shall continue to install handsets centered on small businesses." However, "It seems unlikely that 100% of IC terminals are replaced." An official from the Financial Supervisory Service said, "We will closely examine whether the installation of registered terminals will proceed smoothly in the future and we plan to resolve the obstacles in consultation with card industry and vending industry."

By Hwang Byung Seo BShwang@

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