Survey finds added fees on overseas purchasesA consumer group warned yesterday that any won-denominated Visa and MasterCard payments overseas face additional fees of as much as 8 percent over purchases in U.S. dollars or local currencies.
The Korea Consumer Agency yesterday released a survey of 34 receipts of overseas credit card payments in won for which some merchants use a “dynamic currency conversion” (DCC) service that charges the additional fees.
“Based on our study, the commission fee for paying in won was as little as 249 won or as big as 203,085 won,” said an agency official. “The bigger the payment, the bigger the fee.”
Despite the convenience of DCC, the consumer group says card payments using the system are substantially more expensive than if they were paid in U.S. dollars or the local currency.
Typically, when merchants overseas do not use the DCC system, Visa and MasterCard convert local currency directly into dollars. Korean card companies that are partners of the global companies convert the payment into won at fees of as much as 1.4 percent.
If a consumer makes a purchase from a merchant that uses the DCC system, the local currency is converted first to won and then to dollars and an additional charge incurred.
The fee is much higher than the fees of Korean partner card companies and can reach as much as 8 percent of the purchase price.
Meanwhile, the consumer agency’s study showed that 74 percent of consumers who paid in won were not aware that they were being charged for the DCC service because they had not been informed of it at the point of sale.
They only found out later when they received their credit card statements.
“Consumers would think the service they were being offered is at no charge, when in reality they are being charged extra fees,” said the consumer agency official.
BY LEE EUN-JOO [firstname.lastname@example.org]
More in Finance
Kospi hits midday high, closes down on profit-taking
Naver Financial launches advice service for entrepreneurs
[NEWS ANALYSIS] As foreigners rush back, market does an about-face
CU gets into the foreign exchange transaction business
Kospi hits another record high despite Covid spike