It pays to choose local currency when paying by cardTravelers are being encouraged to make credit card payments in local currencies on their trips abroad to save money.
The Financial Supervisory Service (FSS) said yesterday that tourists who use their domestic cards to make Korean won payments in other countries are paying commission fees for the luxury that add between 3 and 5 percent to the size of their bill.
Often, salespeople at overseas shopping malls, supermarkets and even online market places give Korean customers a choice of two currencies in which to pay by plastic. However, those who choose Korean won must also pay for a so-called dynamic currency conversion (DCC).
The gap between, for example, buying a pair of Nike sneakers in Oregon using U.S. dollars or Korean won can grow even larger if the won-dollar exchange rate fluctuates by the time the Korean card company handles the bill.
The FSS has been looking into the matter after it received a flood of complaints from shoppers claiming they paid more than the price of the goods or services purchased overseas when paying by plastic. Many requested refunds.
“We’re encouraging customers to pay by foreign currency because the FSS cannot intervene in the matter as it is out of the watchdog’s jurisdiction,” said Jeong Yeong-seok, an official at the anti-trust agency.
The FSS said a total of 463.7 billion won ($404 million) was paid in Korean currency-denominated credit card transactions last year. Assuming the standard DCC commission fee is 3 percent, customers spent 13.9 billion won more than if they had paid in foreign currency.
By Kim Mi-ju [email@example.com]
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