Despite gov’t incentives, debit cards still disappoint
The staff at the bar swiped Nam’s card several times, but the payment wouldn’t go through.
Nam, 37, later learned that his debit card didn’t work because his bank was conducting maintenance checks on the computerized system.
“My friend had to pay,” Nam said. “I tried to show off but instead I was ashamed.”
The government is encouraging shoppers to use debit cards more than credit cards to curb impulsive spending by raising tax breaks for debit card use to 30 percent this year from last year’s 25 percent while slashing tax breaks for credit cards to 15 percent from 20 percent.
But shoppers still find debit cards unattractive because they can’t use them past midnight at bars, restaurants and online shopping malls whenever banks undergo maintenance checks on their computerized systems.
The maintenance checks can take up to four hours, and during these hours, debit cards’ financial transactions are completely blocked.
Shoppers say there’s more to complain about. They say they can’t buy goods on their trips overseas and can’t shop online using overseas Web sites.
There are few stores that take Korean debit cards overseas, shoppers said.
Enabling Korean debit cards to work worldwide requires debit card issuers to sign partnerships with overseas stores.
Financial Services Commission Chairman Kim Seok-dong had an embarrassing experience in June when he went on a business trip to Thailand.
He went to a department store in Bangkok to buy some gifts for his family.
“Kim had mentioned he will boost debit card use at that time, but he was baffled when he directly experienced the downside of debit cards,” said an official at the FSC.
Shoppers say getting a refund for canceled debit card purchases can be a hassle as it takes up to three days.
They say getting a refund for a canceled debit card purchase takes days because a store needs to notify the card firm of the cancelation.
The firm undergoes a series of checks before refunding the money to a customer’s bank account.
According to the Financial Supervisory Service, debit card spending totaled 21.2 trillion won ($19.7 billion) in the third quarter, up from 17.7 trillion won on-year.
Debit card usage makes up 14.9 percent of overall card use, up from 13.3 percent on-year.
Critics called on the government to improve the convenience of debit card use by amending the current system.
In light of the criticism, the government plans to allow shoppers to purchase up to 300,000 won of goods and services per month interest-free even if their bank accounts are at zero.
By Sohn Hae-yong [email@example.com]
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