South Korea’s top financial regulator said Wednesday it will allow local credit card firms to issue mobile-only credit cards, rather than conventional plastic ones, to clients later this month as part of efforts to improve convenience and speed in electronic transactions.
Under the current law, mobile cards have played second fiddle to conventional magnetic strip-based credit cards due to person-to-person authentication and authorization regulations.
The Financial Services Commission said credit card firms can issue electronic cards for customers’ smartphones starting this month, since the public authentication program provided by local financial institutions can be downloaded onto mobile devices without physically visiting the company.
In order to prevent fraudulent card use, however, card issuers must tighten authentication procedures before issuing mobile-only credit cards, the FSC said.
They must double check the identification of card holders through text messages or telephone calls at the same time and issue mobile-only cards at least one day after the customer applies for them, the FSC noted.
Also, the mobile credit card will not offer card loan services, it added.
The FSC has moved to remove hurdles in the financial sector especially in e-commerce as it has placed top priority on financial technology, or fintech, calling it a new future growth engine for the South Korean economy. (Yonhap)
