Consumer Finance in South Korea
Euromonitor International's Consumer Finance in South Korea report establishes the size and structure of the market for ATMs, credit cards, debit cards, store cards and smart cards. It looks at key players in the market (issuers and operators), number of cards in circulation, numbers transactions and value of transactions. It offers strategic analysis of sector forecasts and trends to watch.
Buy online to access strategic market analysis and an interactive statistical database of value and volume for retail and internet transactions, number of cards in circulation and company brand shares.
Tables: 150 | Publication date: Jun 2009
Why buy this report
- Get insight into trends in market performance
- Pinpoint growth sectors and identify factors driving change
- Identify market and brand leaders and understand the competitive environment
Product coverage
Consumer lending; Financial cards and payments
Executive summary
Credit cards enjoy excellent transaction volume and value growth
Credit cards established themselves as the most common payment method in South Korea. As such, credit card use is continuing to increase in terms of transaction volume and value. Tax benefits along with a wealth of incentives, not to mention the convenience attached to credit cards, encourage consumers to use credit cards rather than any other form of payment. Incentives range from discounts, redeemable points to cash back and interest-free instalment payment plans. Those incentives are accumulated and can be used at a wide range of retail channels, including petrol/gas stations, hypermarkets, movie theatres, travel agents and restaurants. Widespread incentives have led many people to feel somehow deprived when purchasing good and services without discounts or points rewards. As such, South Koreans are now using credit cards as a means of saving money.
Mature market nevertheless poses challenge to card issuers
It is the case that most South Korean cardholders usually have three to four cards. Multiple card ownership highlights the fierce competition between credit card companies and banks. People are frequently asked by relatives and friends to apply for a credit card. In addition, card companies strive to differentiate their products as a way of attracting new members. People used to find it useful to have more than one card to take advantage of the benefits offered by different cards. Increased competition is also characterised by the aggressive attack from banks as the card business proved a profitable segment when housing loan sales were constrained by the property market slump. Credit card companies have scrambled to defend their leading position by launching new products which are attractive to consumers but which have resulted in falling operating profits.
Cheque cards take the market by storm
Cheque cards, which act as a “plastic” cheque book for consumers, gained popularity among college students and those who wanted to control the use of card expenditure by limiting the available balance in their bank account. As a result, an increasing number of high school students applied for cheque cards. Cheque cards however also had downsides in that they could not be used abroad and offered only limited incentives. In 2007, cheque cards were upgraded to the point where some cheque cards combine a credit card function to enable users to make a purchase when their balance is not sufficient. Given that users of cheque cards are likely future users of credit cards, companies began to load cheque cards with increased rewards designed for young users. Many cheque cards can now be used abroad.
Slow deployment of POS terminals for smart cards hampers potential
The majority of credit cards are issued in smart format under the financial watchdog’s decree on standardisation relating to smart cards. However, the lack of smart credit card readers makes the widespread roll-out of smart cards largely academic. The number of merchants equipped with smart card POS terminals is still increasing, but the completion of the POS infrastructure did not take place in 2008 because of high investment costs of replacing or upgrading conventional POS terminals.
Premiumisation of credit cards in the future
As credit cards are established as the main payment method, consumer attitudes towards credit cards are changing. Annual fees used to be the major factor in choosing a credit card, and a high percentage of consumers preferred a card bearing no annual fee. However, credit cards began to offer more specialised incentives through affiliations to a wider range of retailers and organisations such as hospitals or after-school institutions. Points rewards are no longer ignored and consumers are eager to collect points as they can use them as cash when sufficient are accumulated. Consumers increasingly choose credit cards that offer better services despite the annual fee. At the same time, credit card companies are strategically offering greater rewards for heavy card users.
Table of contents
CONSUMER FINANCE IN SOUTH KOREA : MARKET INSIGHT
EXECUTIVE SUMMARY
Credit cards enjoy excellent transaction volume and value growth
Mature market nevertheless poses challenge to card issuers
Cheque cards take the market by storm
Slow deployment of POS terminals for smart cards hampers potential
Premiumisation of credit cards in the future
KEY TRENDS AND DEVELOPMENTS
Credit cards in circulation decreased despite aggressive recruitment efforts
Credit card is payment method of choice in South Korea
Mobile cards signal next-generation cards
Soaring household expenditure
Affiliation is actively sought
MARKET DATA
Table 1 Consumer Payments: Value 2003-2008
Table 2 Financial Cards: Number of Cards in Circulation 2003-2008
Table 3 Financial Cards Transactions: Value 2003-2008
Table 4 Financial Cards: Number of Transactions 2003-2008
Table 5 Financial Cards: Number of Accounts 2003-2008
Table 6 Financial Cards: Number of Cards by Issuer 2003-2007
Table 7 Financial Cards: Number of Cards by Operator 2003-2007
Table 8 Financial Cards: Card Payment Transaction Value by Operator 2003-2007
Table 9 Financial Cards: Card Payment Transactions by Acquirer 2003-2007
Table 10 Consumer Payments Forecast: Value 2008-2013
Table 11 Financial Cards Forecast: Number of Cards in Circulation 2008-2013
Table 12 Financial Cards Forecast: Value 2008-2013
Table 13 Financial Cards Forecast: Number of Transactions 2008-2013
Table 14 Financial Cards Forecast: Number of Accounts 2008-2013
MARKET INDICATORS
Table 15 Number of POS Terminals 2004-2008
Table 16 Number of ATMs 2004-2008
Table 17 Disposable Income 2003-2008
Table 18 Value Lost to Fraud 2003-2008
Table 19 Card Expenditure by Location 2008
Table 20 Card Expenditure by Sector 2008
Table 21 Financial Cards in Circulation by Type: % Number of Cards 2004-2008
Table 22 Domestic versus Foreign Spend 2008
DEFINITIONS
Summary 1 Research Sources
CONSUMER LENDING IN SOUTH KOREA
EXECUTIVE SUMMARY
Stricter credit qualifications reduce new mortgage loans
Card lending increases steadily
The credit rating is vital for external financing
The role of secondary financial institutions grows
The demand for easy consumer credit will grow
KEY TRENDS AND DEVELOPMENTS
Consumers still perceive house purchases as potential windfalls
Tighter credit requirements allow new opportunities for non-primary lenders
Consumer price hikes
Household debt repayment capacity declines
The large number of family businesses creates added risks
MARKET DATA
Table 23 Consumer Lending By Sector: Outstanding Balance: Value 2003-2008
Table 24 Consumer Lending By Sector: Outstanding Balance: % Value Growth 2003-2008
Table 25 Consumer Lending By Sector: Gross Lending: Value 2003-2008
Table 26 Consumer Lending By Sector: Gross Lending: % Value Growth 2003-2008
Table 27 Consumer Lending: Non-performing vs Other Loans 2003-2008
Table 28 Mortgages/Housing: Non-performing vs Other Loans 2003-2008
Table 29 Consumer Credit: Non-performing vs Other Loans 2003-2008
Table 30 Forecast Consumer Lending By Sector: Outstanding Balance: Value 2008-2013
Table 31 Forecast Consumer Lending By Sector: Outstanding Balance: % Value Growth 2008-2013
Table 32 Forecast Consumer Lending By Sector: Gross Lending: Value 2008-2013
Table 33 Forecast Consumer Lending By Sector: Gross Lending: % Value Growth 2008-2013
DEFINITIONS
Summary 2 Research Sources
LOCAL COMPANY PROFILES - SOUTH KOREA
BC CARD CO LTD - FINANCIAL CARDS AND PAYMENTS - SOUTH KOREA
STRATEGIC DIRECTION
KEY FACTS
Summary 3 BC Card Co Ltd: Key Facts
Summary 4 BC Card Co Ltd: Operational Indicators
COMPANY BACKGROUND
COMPETITIVE POSITIONING
Summary 5 BC Card Co Ltd: Competitive Position 2007
HYUNDAI CARD CO LTD - FINANCIAL CARDS AND PAYMENTS - SOUTH KOREA
STRATEGIC DIRECTION
KEY FACTS
Summary 6 Hyundai Card Co Ltd: Key Facts
Summary 7 Hyundai Card Co Ltd: Operational Indicators
COMPANY BACKGROUND
COMPETITIVE POSITIONING
Summary 8 Hyundai Card Co Ltd: Competitive Position 2007
LOTTE CARD CO LTD - FINANCIAL CARDS AND PAYMENTS - SOUTH KOREA
STRATEGIC DIRECTION
KEY FACTS
Summary 9 Lotte Card Co Ltd: Key Facts
Summary 10 Lotte Card Co Ltd: Operational Indicators
COMPANY BACKGROUND
COMPETITIVE POSITIONING
Summary 11 Lotte Card Co Ltd: Competitive Position 2007
SAMSUNG CARD CO LTD - FINANCIAL CARDS AND PAYMENTS - SOUTH KOREA
STRATEGIC DIRECTION
KEY FACTS
Summary 12 Samsung Card Co Ltd: Key Facts
Summary 13 Samsung Card Co Ltd: Operational Indicators
COMPANY BACKGROUND
COMPETITIVE POSITIONING
Summary 14 Samsung Card Co Ltd: Competitive Position 2007
SHINHAN CARD CO LTD - FINANCIAL CARDS AND PAYMENTS - SOUTH KOREA
STRATEGIC DIRECTION
KEY FACTS
Summary 15 Shinhan Card Co Ltd: Key Facts
Summary 16 Shinhan Card Co Ltd: Operational Indicators
COMPANY BACKGROUND
COMPETITIVE POSITIONING
Summary 17 Shinhan Card Co Ltd: Competitive Position 2007
ATM TRANSACTIONS IN SOUTH KOREA
HEADLINES
TRENDS
COMPETITIVE LANDSCAPE
PROSPECTS
SECTOR DATA
Table 34 ATM Cards Sector Performance: 2003-2008
Table 35 ATM Cards Sector Performance: Number of Cards in Circulation 2003-2008
Table 36 ATM Cards Sector Performance: % Growth 2003-2008
Table 37 ATM Cards in Circulation Sector Performance: % Growth 2003-2008
Table 38 ATM Cards Forecast Sector Performance: 2008-2013
Table 39 ATM Cards Forecast Sector Performance: Number of Cards in Circulation 2008-2013
Table 40 ATM Cards Forecast Sector Performance: % Growth 2008-2013
Table 41 ATM Cards in Circulation Forecast Sector Performance: % Growth 2008-2013
DEBIT TRANSACTIONS IN SOUTH KOREA
HEADLINES
TRENDS
COMPETITIVE LANDSCAPE
PROSPECTS
SECTOR DATA
Table 42 Debit Cards Sector Performance: 2003-2008
Table 43 Debit Cards Sector Performance: Number of Cards in Circulation 2003-2008
Table 44 Debit Cards Sector Performance: % Growth 2003-2008
Table 45 Debit Cards in Circulation Sector Performance: % Growth 2003-2008
Table 46 Debit Cards: Number of Cards by Issuer 2003-2007
Table 47 Debit Cards: Number of Cards by Operator 2003-2007
Table 48 Debit Cards Transactions by Acquirer 2003-2007
Table 49 Debit Cards Payment Transaction Value by Operator 2003-2007
Table 50 Debit Cards Forecast Sector Performance: 2008-2013
Table 51 Debit Cards Forecast Sector Performance: Number of Cards in Circulation 2008-2013
Table 52 Debit Cards Forecast Sector Performance: % Growth 2008-2013
Table 53 Debit Cards in Circulation Forecast Sector Performance: % Growth 2008-2013
CREDIT CARD TRANSACTIONS IN SOUTH KOREA
HEADLINES
TRENDS
COMPETITIVE LANDSCAPE
PROSPECTS
SECTOR DATA
Table 54 Credit Cards Sector Performance: 2003-2008
Table 55 Credit Cards Sector Performance: Number of Cards in Circulation 2003-2008
Table 56 Credit Cards Sector Performance: % Growth 2003-2008
Table 57 Credit Cards in Circulation Sector Performance: % Growth 2003-2008
Table 58 Personal Credit Cards Sector Performance: 2003-2008
Table 59 Personal Credit Cards Sector Performance: Number of Cards in Circulation 2003-2008
Table 60 Personal Credit Cards Sector Performance: % Growth 2003-2008
Table 61 Personal Credit Cards in Circulation Sector Performance: % Growth 2003-2008
Table 62 Commercial Credit Cards Sector Performance: 2003-2008
Table 63 Commercial Credit Cards Sector Performance: Number of Cards in Circulation 2003-2008
Table 64 Commercial Credit Cards Sector Performance: % Growth 2003-2008
Table 65 Commercial Credit Cards in Circulation Sector Performance: % Growth 2003-2008
Table 66 Credit Cards: Number of Cards by Issuer 2003-2007
Table 67 Credit Cards: Number of Cards by Operator 2003-2007
Table 68 Credit Cards Transactions by Acquirer 2003-2007
Table 69 Credit Cards Payment Transaction Value by Operator 2003-2007
Table 70 Personal Credit Cards Payment Transaction Value by Operator 2003-2007
Table 71 Commercial Credit Cards Payment Transaction Value by Operator 2003-2007
Table 72 Credit Cards Forecast Sector Performance: 2008-2013
Table 73 Credit Cards Forecast Sector Performance: Number of Cards in Circulation 2008-2013
Table 74 Credit Cards Forecast Sector Performance: % Growth 2008-2013
Table 75 Credit Cards in Circulation Forecast Sector Performance: % Growth 2008-2013
Table 76 Personal Credit Cards Forecast Sector Performance: 2008-2013
Table 77 Personal Credit Cards Forecast Sector Performance: Number of Cards in Circulation 2008-2013
Table 78 Personal Credit Cards Forecast Sector Performance: % Growth 2008-2013
Table 79 Personal Credit Cards in Circulation Forecast Sector Performance: % Growth 2008-2013
Table 80 Commercial Credit Cards Forecast Sector Performance: 2008-2013
Table 81 Commercial Credit Cards Forecast Sector Performance: Number of Cards in Circulation 2008-2013
Table 82 Commercial Credit Cards Forecast Sector Performance: % Growth 2008-2013
Table 83 Commercial Credit Cards in Circulation Forecast Sector Performance: % Growth 2008-2013
CHARGE CARD TRANSACTIONS IN SOUTH KOREA
HEADLINES
TRENDS
COMPETITIVE LANDSCAPE
PROSPECTS
SECTOR DATA
Table 84 Charge Cards Sector Performance: 2003-2008
Table 85 Charge Cards Sector Performance: Number of Cards in Circulation 2003-2008
Table 86 Charge Cards Sector Performance: % Growth 2003-2008
Table 87 Charge Cards in Circulation Sector Performance: % Growth 2003-2008
Table 88 Personal Charge Cards Sector Performance: 2003-2008
Table 89 Personal Charge Cards Sector Performance: Number of Cards in Circulation 2003-2008
Table 90 Personal Charge Cards Sector Performance: % Growth 2003-2008
Table 91 Personal Charge Cards in Circulation Sector Performance: % Growth 2003-2008
Table 92 Commercial Charge Cards Sector Performance: 2003-2008
Table 93 Commercial Charge Cards Sector Performance: Number of Cards in Circulation 2003-2008
Table 94 Commercial Charge Cards Sector Performance: % Growth 2003-2008
Table 95 Commercial Charge Cards in Circulation Sector Performance: % Growth 2003-2008
Table 96 Charge Cards: Number of Cards by Issuer 2003-2007
Table 97 Charge Cards: Number of Cards by Operator 2003-2007
Table 98 Charge Cards Transactions by Acquirer 2003-2007
Table 99 Charge Cards Payment Transaction Value by Operator 2003-2007
Table 100 Personal Charge Cards Transaction Value by Operator 2003-2007
Table 101 Commercial Charge Cards Payment Transaction Value by Operator 2003-2007
Table 102 Charge Cards Forecast Sector Performance: 2008-2013
Table 103 Charge Cards Forecast Sector Performance: Number of Cards in Circulation 2008-2013
Table 104 Charge Cards Forecast Sector Performance: % Growth 2008-2013
Table 105 Charge Cards in Circulation Forecast Sector Performance: % Growth 2008-2013
Table 106 Personal Charge Cards Forecast Sector Performance: 2008-2013
Table 107 Personal Charge Cards Forecast Sector Performance: Number of Cards in Circulation 2008-2013
Table 108 Personal Charge Cards Forecast Sector Performance: % Growth 2008-2013
Table 109 Personal Charge Cards in Circulation Forecast Sector Performance: % Growth 2008-2013
Table 110 Commercial Charge Cards Forecast Sector Performance: 2008-2013
Table 111 Commercial Charge Cards Forecast Sector Performance: Number of Cards in Circulation 2008-2013
Table 112 Commercial Charge Cards Forecast Sector Performance: % Growth 2008-2013
Table 113 Commercial Charge Cards in Circulation Forecast Sector Performance: % Growth 2008-2013
GENERAL PURPOSE PRE-PAID CARD TRANSACTIONS IN SOUTH KOREA
HEADLINES
TRENDS
COMPETITIVE LANDSCAPE
PROSPECTS
SECTOR DATA
Table 114 General Purpose Pre-paid Cards Sector Performance: 2003-2008
Table 115 General Purpose Pre-paid Cards Sector Performance: Number of Cards in Circulation 2003-2008
Table 116 General Purpose Pre-paid Cards Sector Performance: % Growth 2003-2008
Table 117 General Purpose Pre-paid Cards in Circulation Sector Performance: % Growth 2003-2008
Table 118 General Purpose Pre-paid Cards by Type: % Number of Cards 2004-2008
Table 119 General Purpose Pre-paid Cards: Number of Cards by Operator 2003-2007
Table 120 General Purpose Pre-paid Cards Transaction Value by Operator 2003-2007
Table 121 General Purpose Pre-paid Cards Forecast Sector Performance: 2008-2013
Table 122 General Purpose Pre-paid Cards Forecast Sector Performance: Number of Cards in Circulation 2008-2013
Table 123 General Purpose Pre-paid Cards Forecast Sector Performance: % Growth 2008-2013
Table 124 General Purpose Pre-paid Cards in Circulation Forecast Sector Performance: % Growth 2008-2013
STORE CARD TRANSACTIONS IN SOUTH KOREA
HEADLINES
TRENDS
COMPETITIVE LANDSCAPE
PROSPECTS
SECTOR DATA
Table 125 Store Cards Sector Performance: 2003-2008
Table 126 Store Cards Sector Performance: Number of Cards in Circulation 2003-2008
Table 127 Store Cards Sector Performance: % Growth 2003-2008
Table 128 Store Cards in Circulation Sector Performance: % Growth 2003-2008
Table 129 Store Cards: Number of Cards by Issuer 2003-2007
Table 130 Store Cards Forecast Sector Performance: 2008-2013
Table 131 Store Cards Forecast Sector Performance: Number of Cards in Circulation 2008-2013
Table 132 Store Cards Forecast Sector Performance: % Growth 2008-2013
Table 133 Store Cards in Circulation Forecast Sector Performance: % Growth 2008-2013