Financial Supervisory Service and Card Industry to Strengthen Exchange Loss Compensation for Overseas Payment Cancellations

Strengthening Exchange Loss Compensation by Credit Card Companies and Consumer Guidance
System Upgrade to Expand Automatic Exchange Loss Compensation
Enhanced Notifications for Overseas Payment Cancellations

#After paying for airline tickets totaling 7.4 million won for four friends with his credit card all at once, Mr. A canceled one ticket (1.85 million won) a month later. However, during that time, the exchange rate dropped by 80 won, so the actual refund amount was only 1.75 million won. Mr. A discovered this only later and, after directly applying for compensation with the credit card company, was able to recover the 100,000 won difference.

On September 22, the Financial Supervisory Service announced that, together with the credit card industry, it has established measures to strengthen exchange loss compensation by credit card companies in the event of overseas card payment cancellations, so consumers will not suffer disadvantages like in Mr. A’s case.

The new measures upgrade the system, including improvements to the original-transaction matching logic, so that even if some payment information on the cancellation slip does not match exactly or the transaction is partially canceled, the system can still identify the original transaction and automatically compensate for exchange losses. This will allow for broader automatic compensation of exchange rate losses, even if the consumer does not submit a separate compensation request.

For canceled transactions where exchange losses are not automatically compensated through the upgraded system, a representative will introduce and operate a process to review the payment details and provide compensation to the consumer for exchange rate losses.

Currently, when an overseas card payment is canceled, consumers are notified of the foreign currency refund amount via text message and other means, but the Korean won refund amount is not provided separately. As a result, it is not easy for consumers to immediately confirm the actual refunded amount in won or whether any exchange loss occurred.

Furthermore, if the transaction to be canceled cannot be identified and the exchange rate effective on the date the cancellation slip is received is applied, the consumer may incur exchange rate losses or gains due to currency fluctuations, but there has been no separate notice, making it difficult for consumers to be aware of these facts.

Going forward, once an overseas card payment is canceled, both the foreign currency and Korean won refund amounts will be provided in notifications such as text messages. In addition, if the original transaction cannot be finally confirmed for a canceled transaction, a notice stating that 'the exchange rate on the date the cancellation slip was received has been applied because matching the original transaction was not possible' will also be sent by text. Meanwhile, information about compensation eligibility and how to apply for exchange loss compensation will also be strengthened through the credit card company’s website and mobile app.

The Financial Supervisory Service stated that, depending on preparedness for each system improvement task and the development time required for credit card companies, the new measures will be implemented sequentially.

Credit card companies will start providing notifications of Korean won refund amounts for overseas payment cancellations within this month and will strengthen communications regarding the exchange loss compensation system via websites and mobile apps. In addition, by the end of this year, they plan to complete all implementation preparations, including system development and detailed operational plans, with a goal of full implementation starting next year.

This content was produced with the assistance of AI translation services.