In most countries, a corporate card is a straightforward tool for approved business expenses. In South Korea, the "beop-ka" (법카), or corporate card, operates in a completely different context. It is an unspoken pillar of office culture, a critical component of employee welfare, and a persistent source of high-profile controversy. To understand the beop-ka is to see a hidden layer of the Korean economy where finance, culture, and social obligations merge.
A Tool for Culture, Not Just Expenses
Outside of Korea, corporate cards typically cover travel, client dinners, and office supplies. In Seoul, the beop-ka’s primary function is often internal: funding the daily mechanisms of office life.
This is most visible in its role as the fuel for "hwesik" (회식), or company dinners. These are not just casual team outings; they are quasi-mandatory events central to Korean corporate culture, designed to build cohesion and solidarity. The beop-ka pays for everything, from the barbecue to the multiple rounds of drinks that follow.
But its role extends far beyond large dinners. The beop-ka is frequently used for:
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Team coffee runs.
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Afternoon snacks for the office.
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Supporting employee-led cultural activities or small team-building events.
This spending is understood as part of "bokri-husaeng" (복리후생), or corporate welfare. It is not a formal, itemized benefit like a health plan, but rather a flexible, team-level budget intended to boost morale. This system effectively blurs the line between a personal expense and a professional necessity, making the card a tool of social management.
The Formal Rules for an Informal System
This cultural flexibility does not mean an absence of rules. On the contrary, companies deploy a strict set of formal controls to manage this informal system, creating a constant tension.
Most Korean companies regulate beop-ka spending through several layers:
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Usage Restrictions: Cards are often technically blocked from being used at certain types of businesses. These "Clean Card" systems prevent transactions at establishments deemed inappropriate, such as adult entertainment venues, golf courses, or casinos.
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Time and Amount Limits: It is common to have restrictions on late-night or weekend spending. Companies also set per-person limits for meals (for example, 30,000 KRW per person) to prevent extravagance.
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Approval Hierarchies: While small, everyday expenses may be left to a team leader’s discretion, any significant purchase (often over 500,000 KRW) requires pre-approval through a digital internal system.
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Auditing and Receipts: All spending must be justified. Employees must submit receipts and a brief purpose-of-expenditure report, which are reviewed by accounting departments.
The Beop-ka Divide: Startups vs. Conglomerates
The beop-ka experience is not universal; it differs dramatically based on company size.
Large corporations, or "chaebol," typically use "general-type" corporate cards. These cards are linked directly to the corporation, not an individual. Spending is managed centrally, heavily audited, and analyzed with data to spot fraud. Control and transparency are paramount.
Small and medium-sized enterprises (SMEs), on the other hand, often lack the resources for such complex accounting. They tend to use "personal-type" corporate cards. These are issued in an employee's name but tied to the company's account. This simplifies expense reporting for a small team but also creates a significant gray area, as the line between personal and business spending becomes extremely blurred.
The Gray Zone: Where Welfare Becomes Embezzlement
The system’s deep-rooted ambiguity is its greatest weakness. The beop-ka is at the center of many of Korea's most high-profile corporate and political scandals. The "hidden economy" it creates is a breeding ground for misuse.
Common abuses fall into several categories:
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Personal Use: This is the most frequent issue. Employees may use the card to pay for personal groceries, family dinners, or private shopping, later submitting vague receipts for "team expenses."
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Falsified Transactions: This involves generating fake receipts for services not rendered to pocket the cash.
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Inappropriate Entertainment: The most explosive scandals involve using the beop-ka at "room salons" and other adult entertainment venues. This practice is a recurring social issue, and reports have surfaced of hundreds of billions of won being spent corporate-wide at such establishments.
This behavior is not treated as simply breaking company policy. Legally, the personal use of a beop-ka is often prosecuted as corporate embezzlement or breach of trust. It can lead to severe legal consequences for the individual and significant tax penalties for the company.
The Future: Big Data and a Generational Shift
In response to constant public scandals, the system is under pressure to change. The push for reform is coming from two directions: technology and culture.
Technologically, companies are moving beyond simple "Clean Card" blocks. Many are now implementing AI and big data monitoring systems. These tools analyze spending patterns in real-time to flag anomalies—such as unusual spending times, locations, or frequencies—before they become a legal problem.
Culturally, the ground is shifting. Younger generations of Korean workers (often called the MZ generation) are increasingly resistant to the forced, communal hwesik culture. They often prefer clear, individual benefits and a strict separation between work and private life. This generational shift is slowly eroding the beop-ka's traditional role as a social lubricant, pushing companies to offer more transparent and individualized welfare programs.
The beop-ka remains more than just a piece of plastic. It is a cultural artifact that reflects the complex tension in modern Korea: the pull of traditional, community-focused relationships versus the global demand for transparent, individualistic, and rule-based governance.
Disclaimer: This article is for educational and informational purposes only and should not be considered as financial, investment, or trading advice; always conduct your own research and consult with a qualified financial advisor before making any investment decisions.
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