Blocking Overseas Foreign Currency Payments with Extra Charges... 'Block' Option Available When Issuing Cards

Additional Fees (Approximately 3~8%) Incurred for Overseas Won Currency Payments

[Asia Economy Reporter Park Sun-mi] Dynamic Currency Conversion (DCC) is a service that allows payment in Korean won instead of the local currency when using a card at overseas merchants, which may incur additional fees (approximately 3~8%) charged by the overseas merchants. Would you like to apply for the blocking service?

Starting July 1, financial consumers applying for new credit or debit cards that can be used overseas will receive information from card companies about fees incurred during overseas won payments and will be able to choose whether to use the overseas won payment blocking service.

According to the Financial Supervisory Service on the 17th, the proportion of won payments among overseas card usage transactions has been increasing annually, from 21.9% in 2018 to 37.6% in 2019, and 41.8% in 2020. The ratio of won usage amount to overseas usage amount also rose from 21.1% in 2018 to 23% in 2019, and 27.2% in 2020. However, the number of consumers using the overseas won payment blocking service remains minimal. As of the end of last year, among 96.1 million members holding credit or debit cards usable overseas, only about 1.3% had applied for the overseas won payment blocking service.

Accordingly, financial authorities have prepared measures to strengthen guidance on key information related to overseas won payments, including additional fees, and the blocking service. From next month, consumers applying for new credit or debit cards usable overseas will receive information from card companies about fees incurred during overseas won payments and will be able to choose whether to use the overseas won payment blocking service. This applies not only to face-to-face applications but also to non-face-to-face applications such as internet and mobile. However, for renewals due to expiration and reissuance due to loss or damage, the service will be implemented from January 1, 2022, considering card companies' system development schedules.

Guidance for existing overseas card users will also be strengthened. Just before peak overseas transaction periods such as summer vacation and Lunar New Year and Chuseok holidays, information related to overseas won payments will be sent via text messages.

A Financial Supervisory Service official explained, "Although consumers were aware of additional fees due to the nature of overseas payments, there were cases where they paid extra fees due to language barriers, etc. The number of consumers using the overseas won payment blocking service is minimal, so from July, consumer guidance on overseas won payments will be strengthened."