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Korea retail sales fall; Credit card spending jumps

South Korea retail sales slipped in February – although largely due to the timing of Lunar New Year, according to statisticians.

Sales data from department and discount stores released by the Ministry of Trade show sales at department stores run by Hyundai Department Store, Lotte Shopping and Shinsegae Co fell by 1.9 per cent year-on-year, following a 9 per cent rise in January.

Sales at discount stores fell 7 per cent after rising 11 per cent in January.

A trade ministry official said Lunar New Year spending in 2016 had been split between January and February whereas last year it primarily fell in February.

In other data just released, South Korean credit and debit card spending jumped 8.8 per cent last year as consumers increasingly favored using cards both for small-sized daily settlements and big tax payments.

Card-based spending reached 667.1 trillion won (US$572 million) in 2015, up from 613.2 trillion won the previous year. A 16 per cent increase in debit, or check, card spending outweighed a 7.1 per cent rise in credit card spending last year, the Financial Supervisory Service (FSS) said in a statement.

The combined data covers domestic and overseas card spending only by Korean cardholders, the FSS said.

“A growing number of customers use their credit or check cards for small settlements at convenience stores or tax payments worth over 10 million won. Check card-based spending is likely to rise further due to increased tax returns,” an FSS spokesman said.

In January last year, the government eased regulations to lift the upper limit of 10 million won for tax payments using credit cards. The move encouraged card-based purchases and payments.

The value of tax payments using credit cards soared by 14 trillion won last year compared to a year earlier, the statement said.

Meanwhile, the number of credit cards issued by eight card companies and 11 banks last year reached 93.14 million, up 0.9 per cent from a year earlier. Debit card issuances climbed 4.5 per cent to 105.27 million during the same period.

 

 

 

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