Interest-Free Installment Benefit Omissions Occur Annually
Time Lag Between Partners When Registering Merchants
"Going Forward, Merchants Will Be Reflected Simultaneously"
It has been revealed that users of the ‘Lotte Card X Naver Pay Credit Card,’ which gained popularity for its 24-month interest-free installment plan, have been burdened with installment interest rates of up to 19.9% due to financial companies’ errors, occurring about once a year. As the sharing of merchant information between Lotte Card and Naver Pay has been delayed, some consumers did not receive the interest-free benefits. In response, both companies have decided to prevent recurrence by registering new merchants on the same day.
According to a report compiled by Asia Economy on the 12th, Lotte Card has repeatedly excluded some eligible users of its credit card product ‘Naver Pay Shopping Enroca’ from the interest-free installment benefits. These users reportedly paid installment fees ranging from 13.1% to 19.9% (for 12 to 24 months). A Lotte Card official stated, “Since its launch in June 2021, there have been a total of three related complaints.”
The problematic card is a product that offers long-term interest-free installments for payments of 500,000 KRW or more at Naver Pay merchants such as Naver Shopping, Lotte ON, Musinsa, Nike, and Today’s House. There are no conditions on the previous month’s spending performance nor limits on the number of times the interest-free benefit can be applied. As a result, it has been very popular among consumers looking to purchase expensive electronics or furniture on installments.
Victim A also said, “I issued this card to purchase a computer graphics card worth around 2 million KRW.” He added, “I didn’t realize for over a year after the installment payment in August last year that interest was being charged, and the payment details even stated ‘interest-free.’ Earlier this month, when I had a lump sum to pay off the installments at once, I found out that I had not received the interest-free benefit all along. How many people carefully check installment details on the card company’s application after making an interest-free installment payment?” he lamented.
The reason such incidents keep recurring is the absence of a real-time information sharing system between Lotte Card and Naver Pay. When a new interest-free installment eligible merchant is added, Naver Pay sends the merchant information to Lotte Card, which then manually inputs it into their system. This process can take about 4 to 5 days. If a card consumer makes a payment at a newly added merchant that has not yet been registered in Lotte Card’s system, the interest-free benefit will not be applied.
In response, Lotte Card and Naver Pay have taken measures to prevent similar incidents from recurring. Both companies will register new merchant information on the same day to eliminate time gaps, and if installment payments occur at unregistered merchants, the interest-free benefit will be applied retroactively. A Lotte Card official said, “In the future, when new merchants are created, we have agreed to synchronize the timing of merchant registration between the two companies to ensure no omissions occur in applying the interest-free installment benefits.”
An official from the Financial Supervisory Service stated, “If systemic issues are identified, such as similar problems recurring at a specific card company or deficiencies in internal controls, the supervisory authority can take action.”
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