Overseas credit card payments in Korean won lead to double fees

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The amount of credit card payments overseas in South Korean won reached nearly 4 trillion won ($2.9 billion) in 2023, data showed on Monday.

According to data obtained by Representative Jo Seoung-lae of the Democratic Party of Korea from the Financial Supervisory Service (FSS) on Monday, the total amount of overseas won transactions via eight Korean credit card companies totaled 3.86 trillion won last year.

This marks a 16 percent increase from 3.31 trillion won in the previous year. It is also significantly higher than 2.07 trillion won in 2020 and 2.52 trillion won in 2021.

The eight credit card companies are Lotte Card Co., BC Card Co., Samsung Card Co., Shinhan Card Co., Woori Card Co., Hana Card Co., Hyundai Card Co., and KB Kookmin Card Co.

The rise comes on increased overseas travel.

When Koreans make purchases in local currency at overseas merchants, such as foreign online shopping sites or restaurants, they only pay fees to international card brands such as Visa or Mastercard. They also pay fees to Korean card companies for overseas transactions.

Choosing to pay in won, however, incurs an additional won payment fee, which is shared among overseas merchants, currency exchange providers, and foreign card companies.

Since this fee is avoidable, it is a major issue among consumer complaints filed to the FSS.

Credit card companies offer an overseas won payment blocking service to alleviate this inconvenience, but its usage rates remain low.

Three of the eight credit card companies had a subscription rate of 10 percent or less as of the end of June this year.

“We are continuously working to inform consumers that additional fees may apply when paying in won overseas,” said an FSS official. “We also provide a separate service to block these transactions since a card company blocking overseas won transactions by default could cause inconvenience for consumers who are unaware.”