Competition in South Korea’s travel card market is intensifying

On May 3, 2024, the departure terminal of Incheon International Airport, South Korea's main gateway (data photo: Hyuk Choi)

Competition in the Korean travel card market has intensified as an increase in overseas travel and cross-border shopping has prompted credit card issuers to attract new customers through such services.

In the first five months of 2024, the overseas payment volume of individual customers of South Korea's eight credit card issuers increased by 28% annually, reaching 7.5 trillion won ($5.4 billion), the Credit Finance Association said on Monday. Among them, the total amount of credit card payments was 5.6 trillion won, and the settlement amount of debit cards and check cards was 1.9 trillion won.

Hana Card Co., South Korea's seventh-largest credit card issuer by assets, topped the list with a 19.8% market share during the period, with its customers paying 1.5 trillion won in overseas settlement fees through its credit cards, debit cards and check cards.

From January 2024 to May 2024, the company's check card overseas payment market share reached 52%.

HANA, South Korea’s first travel currency card issuer

A wholly-owned subsidiary of Hana Financial Group, whose bakery unit is South Korea's largest foreign exchange market player, launched the Travel Check card in June 2022.

It is the country's first travel currency card that can accommodate foreign currencies for overseas travel. Users can use the card to withdraw foreign currency cash from automated teller machines (ATMs) in other countries and make purchases at local units.

An official of Hana Card said: “When the Travellog card was launched, it did not attract much attention due to the impact of the new coronavirus (COVID-19).” “But as the epidemic spread, the card went crazy on various blogs. pass.”

Hana Travellog Check Card, South Korea’s first travel currency card (data map)

Bigger players join the fray

Other credit card issuers have launched similar services, with offers such as free currency exchange, fee waivers and free airport lounge access to attract new customers.

Shinhan Card Co., the country's largest credit card issuer by assets, launched the SOL traveler's check card in February. Shinhan Card’s overseas payment market share from January to May was 19.2%, ranking second.

KB Kookmin Card Co. launched the KB Kookmin Travelers Check Card in April, and Samsung Card Co. launched the iD Global Card in April. Woori Card Co. launched the Wibee traveler's check card in June.

The credit card divisions of major financial holding companies such as KB Financial Group, Shinhan Financial Group and Woori Financial Group link travel money cards to foreign currency accounts at their affiliated banks.

For example, customers who want to use the SOL Traveler's Check Card need to have a foreign currency account at Shinhan Bank.

“Travel cards are important not only for card issuers, but also for banks to attract customers,” said an industry insider. “The product is very effective in locking in existing customers.”

Author: Xu Hengqiao

Jongwoo Cheon edited this article.

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