North Korea has announced the launch of a credit card system which can already be used in certain department stores, the Korean Central News Agency (KCNA) reported today.
Dubbed the “Sangyon,” the new system can reportedly be used 24 hours a day and was developed by North Korea’s Institute of Commercial Science.
“The system makes it possible to ensure business through local network with credit card issued by the Central Bank. This 24-hour service system has already been introduced to the West Pyongyang Department Store and many other commercial units, winning popularity among its users,” the KCNA article reads.
North Korea’s Central Bank can offer state-owned enterprises and their state owned subsidiaries loans, but how they would issue credit cards to the wider public is unclear.
Normally credit services require supporting legal and financial infrastructure which, despite recent improvements, North Korea still lacks.
“I suspect that the article is actually referring to either a pre-pay or perhaps more likely a debit card … The issuance of credit cards would require a contract, interest rates and the power to repossess collateral in the event of a default,” Curtis Melvin of the U.S.-Korea Institute at Johns Hopkins University told NK News.
North Korea does already have at least four different electronic debit card services in place. Usually they only differ on where they can be used.
The most popular “Narae” card, is available to both foreigners and locals. It is usually topped up with foreign currency and has a number of uses, including payment in department stores, taxis and buying cellphone credit.
“The Narae card is denominated in North Korean won at the official rate, so there are no differences for Koreans or foreigners,” Simon Cockerell, General Manager of Koryo Tours told NK News.
There’s also the Sonbong card, for use in the Rason Special Economic Zone in the country’s north-east, the minimally used Koryo card and another newly launched debit card called the Jonsong.
“I was told the Jongsong card is more for higher end places like the Masik Ryong ski resort. I’ve only ever seen it used in the Kwangbok Deparment store,” Cockerell said.
Speaking at the recent ‘Doing Business in North Korea’ conference in Seoul, DPRK expert Andrei Lankov said numerous unofficial financial services in the country were “booming.”
Lankov said enterprising North Koreans have developed services allowing domestic and international financial transfers, currency exchange and money lending. The new systems stemmed from a widespread distrust in North Korean banks.
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Featured Image: DPRK Cash Debit Card by Ray Cunningham on 2014-09-22 18:40:39