KOREAN NET

Spending in Korea using foreign cards has skyrocketed nearly 10-fold over the past three and a half years. Shown is a crowded alley at the shopping neighborhood Myeong-dong in Seoul's Jung-gu District. (Korea.net DB)

By Charles Audouin

Spending using cards issued abroad has skyrocketed nearly 10-fold over the past three and a half years.

Korea Credit Data on Aug. 7 said this in an August report on sales paid by overseas cards. Such spending nationwide as of June at establishments linked to KCD's business management service Cashnote was 9.6 times higher than that in January 2023, with the latter set as the base of 100. The figure reached 989 in April.

The study covered some 328,000 merchants nationwide that accept Cashnote and have a history of accepting payments made with cards issued overseas.

KCD attributed such growth mainly to the rise in the number of foreign tourists. Data showed that sales consistently jumped in the spring months of April to May and the fall months of September to November, with both periods coinciding with the peak seasons for inbound tourism.

By region, Seoul accounted for 65% of sales paid by such cards from July last year to June this year, followed by Gyeonggi-do Province with 11%, Busan 8% and Jeju Island 5%.

Over the same period, Busan saw the highest growth of 60% in such sales. Jeju was next with 53.1%, Seoul 36.4% and Incheon 35.9%.

KCD said spending by foreign tourists spread to Busan and Jeju given the rise of both places as major travel destinations.

In the service sector, beauty and medical services accounted for a high share of revenue from this payment method. For instance, color contact lens brand Hapa Kristin saw 34% of sales paid by foreign cards.

Gourmet sandwich chain Eggdrop, Hansik (traditional cuisine) brand Solsot and hair salon franchise Juno Hair also reported relatively high proportions of such sales as part of overall revenue.

The use of cards issued abroad was concentrated in certain commercial districts and stores. Among all businesses surveyed, the top 1% in sales paid by foreign cards over the past year accounted for 66.9% of overall sales in the category. If the top 10% of stores were included, the share rose to 90%.

KCD said, "While spending using cards issued abroad is clearly growing, it is premature to say this trend has spread to the majority of stores."

caudouin@korea.kr