Using an ATM in Japan is not as straightforward as you think.

This feels like it could be esoteric knowledge, which is precisely why i'm sharing it.

The long and short of it is,

• ATMs at 7-11 read the IC chip in your card
• Other banks read your card's magnetic stripe

Why this does matter? Well, a few reasons

1. Sometimes you need money because you're in a relatively rural part of Japan and there's only 1 (one) ATM within 20 minutes in any direction, and it only reads your card's magnetic stripe because it was probably installed 30 years ago
   1. Your card's magnetic stripe doesn't work
2. Fraud

Guess which one happened to me?

That's right!

Both.

I'm by no means a finance nerd, but this took me down a mini rabbit hole of ATM research.

Let's start with first-hand information.

I tried withdrawing money from JP post, Lawson and SMBC ATMs. I was rejected each time. I lived precariously in the Japanese countryside that day. Figuring there was something wrong with my card, I called my bank the next day and - because they offered English-speaking support - had a 5-star support experience in English (thanks Prestia). The support staff explained that i should try withdrawing cash at a 7-11 ATM because 7-11 ATMs are guaranteed to read your IC chip, while other ATMs are more likely to read your magnetic stripe. Lo and behold, her advice was accurate - i managed to withdraw money from 7-11. Prestia re-issued me a new ATM card anyway, and told me to keep my card away from anything magnetic, which is probably what scrambled my magnetic stripe in the first place.

And so, like any reasonable person would have undoubtedly done in this situation, i told myself, this has to be some weird quirk about Japan, and proceeded to google ATM card authentication and the history of ATMs in the country.

A brief written history about ATMs and authentication in Japan (as told by me, an unreliable narrator who omits a lot of things in the process)

• The first ATM in Japan's history was release in 1977, by a company called Oki. I have the privilege of knowing this because the Internet Processing Society of Japan documented this on a page that looks like it was built as the modern web itself was being built. It's a breath of fresh air, honestly. I also urge you to visit Oki's website and to click around. This is a piece of internet history, frozen in time in, say, the 2000s (look at the chart on this page!)
• 7-11's banking arm also has an incredible history page. I'm convinced it was designed in excel. But i thoroughly admire their commitment to posterity. It's somebody's job to update this! In English!!
• For ATM cards, the magnetic stripe is the primary mode of authentication. The stripe hard-codes information about the user on it. When swiped at a terminal, the device reads the static, hard-coded data from the stripe and authorises the transaction.
• This is not safe. How not safe? $13M-stolen-in-3-hours not safe.
• In 2005 there was talk about replacing the magnetic stripe with IC-chip verification. It's now 2025. The magnetic stripe is still the primary mode of authentication at ATMs in Japan. The more things change the more they stay the same.

So, fraud.

As i was reading all of this i thought back to a few months ago when i noticed a line on my bank statement for a transaction i didn't make. Innocuous, it was for an Amazon Prime subscription. 600 yen. Easy to miss.

Except, I don't have an Amazon Prime subscription.

At the time i called my bank (again, shout out Prestia English support), convinced them i did not make that transaction, and let them fill out a fraud report. I wondered a little how this could have happened, but didn't think too much of it.

Now though? Now it makes sense.

A few days before the fraudulent transaction i made a withdrawal at my nearby SMBC ATM. You know, the one that reads the magnetic stripe.

I guess i won't be going back there again.

Okay, so what's the ATM takeaway?

If you live here, always, always, always use the 7-11 ATM.

If you're a visitor, avoid enabling your magnetic stripe if possible, and if you need to withdraw money, always, always, always use the 7-11 ATM.

While obvious in retrospect, its something that i never thought i'd even need to think about.

I don't think there's a single ATM in Singapore that still reads your magnetic stripe. This problem was solved 15 years ago when the banking association mandated the use of IC chips, along with other fraud mitigation measures. DBS has been issuing cards with the magnetic stripe disabled for overseas use by default since 2013. The Singapore government has truly abstracted away most complications in its citizen's daily lives.

In Japan progress is slow. Aside from 7-11, i wasn't able to find any particular documentation from other banks confirming their ATMs read IC chips. Mizuho bank says that their withdrawal limit at ATMs that read IC chips is higher than those that read magnetic stripes. I infer this means they have a mix of both types of ATMs in the wild. But, there's no way of knowing until after you actually insert your card.

Why take the risk?

I'm sticking with 7-11.