North Korea too is beginning to get a hold of credit cards. Normally, foreign travelers in North Korea make payments with US dollars or euros, and until recently, they could not use credit cards that charge in US dollars. American credit card service companies such as VISA and MasterCard explained that it is very difficult to operate in North Korea due to economic sanctions on the country and its lack of financial institutions authorized for international transaction.
Except South Koreans who need official approval from the Ministry of National Unification in accordance with the Inter-Korea Exchange and Cooperation Act, Foreigners who wish to enter the country must obtain a visa from the North Korean embassy. North Korea's institutions like, for example, Committee for the Promotion of External Economic Cooperation (CPEEC), Chosun Asia-Pacific Committee, and Inter-Korea Economic Association (IKEA) must contact the Ministry of Foreign Affairs, which decide whether to approve the visit before issuing a visa to overseas organizations.
As of today, North Korea's visa issuance fee - albeit subject to change - is US$ 60 per person. The procedure requires an application form, two pictures, a copy of the passport, and certificate of employment, and so on. The Embassy of North Korea in Beijing processes visas the day before and in the morning of the day when there is a flight from Beijing or Shenyang to Pyongyang. At the entrance, instead of a stamp on the passport, North Korea issues an additional visa, which is to be returned when departing the country. Visitors must record the name - the name of the group if applicable - and date of birth as well as nationality, occupation, job position, type and number of the passport, date of entrance and departure, and transportation information.
Then, how do foreigners use a card, instead of cash, to make payment in North Korea According to Minjok Tongshin, the pro-North-Korea online journal run by a South Korean living in the U.S, the hotels and shops that are frequented by expatriates and foreigners recently began to accept the electronic payment card called Narae.
The report explained, "Even though it can be used only within North Korea, the card adopts the same form and usage as normal credit cards used around the world." Narae is more like a debit card, or a check card in South Korea, than a credit card in a sense that users first put a certain amount of money with which to make payment.
The first electronic payment card issued by Chosun Trade Bank, Narae can be used without limits at hotels and stores in North Korea," Minjok Tongshin added. The front side where both 'electronic payment card' and 'Narae' are written in Korean contains an integrated circuit (IC) chip on the left, which requires more sophisticated technologies than those used for old magnetic cards.
In addition to the IC, date of issuance and 16-digit card number also resemble generic credit cards widely used in other parts of the world. Foreigners who want to use the card need to pay in US dollars or euros at a foreign exchange of the Foreign Payment Bank for an amount that will be subsequently changed into North Korean currency depending on the exchange rate. It costs three dollars to make a card, and more than three times of incorrect input of the 4-digit password, which is chosen by the user, will automatically block the payment. Users can add more cash to their card at anytime.
Narae is also similar to normal credit cards since it can be reissued, if lost or damaged, with proof of identity and the user takes full responsibility for their negligence.
The user guide states that "the card holder can retrieve the full amount of money remaining in the card in cash; the personal information is strictly protected; and that the money saved in the card is subject to legal protection."
Although only used within North Korea, Narea provides convenience for foreigners who stay in the country. Experts believe that North Korea will further expand the usage of such payment card as they advance the IT industry and thus open the door to the rest of the world.