Starting Next Month, Virtual Card Issuance Service for Overseas Direct Purchases Expanded to All Card Companies

[Asia Economy Reporter Kim Hyo-jin] The virtual card issuance service for overseas direct purchases, currently implemented by some card companies, will be expanded to all card companies starting next month.

The Financial Supervisory Service (FSS) announced on the 27th that this measure will be implemented to prevent consumer card information leakage related to overseas direct purchases.

When making card payments for domestic online transactions, customers' card information is encrypted, and merchants such as online shopping malls are not allowed to store card information.

However, many overseas online merchants store card information directly without encryption and process payments, leading to cases of information leakage.

Additionally, since overseas direct purchase payments usually require only the card number, expiration date, and CVC code, there is a high risk of information being stolen through hacking and other means.

Accordingly, the FSS plans to expand the virtual card issuance service for overseas direct purchases, currently implemented by some card companies, to all card companies starting January next year.

The issuance targets are consumers who hold overseas international brand affiliated cards (VISA, Master, AMEX, UnionPay UPI, JCB, etc.) issued by domestic card companies.

These consumers can issue virtual cards through card company applications (apps) and use them for a certain period.

When applying, a virtual card with a randomly generated card number, expiration date, and CVC code is issued.

The validity period can be selected from a minimum of one week, and the number of payment transactions can be chosen according to the validity period. Payment limits can also be set for single use or on a weekly/monthly basis.

According to the FSS, the scale of overseas payments by domestic credit card members was 16.3423 trillion KRW (combined online and offline) in 2018, increasing to 17.1728 trillion KRW last year. This year, up to August, it was recorded at 6.428 trillion KRW.