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South Korea Country Report

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  • Published Date: December 2020

A comprehensive overview of the cards, payments and consumer banking market in South Korea, with insightful commentary backed by relevant data.

Fintech innovation is attacking profits both for bank and private card issuers, while tax deduction-supported debit cards have been regaining favour in consumer wallets. As elsewhere in this region, QR code payments are also growing popular, prompted by the successful use of the feature by Kakao Pay. The country's most valuable fintech, Toss, has built on its P2P transfer success to start a neobank, the third to enter this market.

What you will learn from this South Korea payments report:

  • How infrastructure and regulation are birthing a cashless society
  • What methods are being displaced by mobile payments
  • Why credit cards dominate online payments
  • The role of tax benefits in debit card usage
  • How the credit card has recovered from cybertheft setbacks

SOUTH KOREA CARDS & PAYMENTS REPORT | KEY FACTS

  • Household debt continues to grow at one of the highest rates in the world, reaching 98 percent of GDP in 2020.
  • Card payments account for the bulk of consumer expenditure, with cash use in decline.
  • Boosted by m-commerce, the e-commerce market has grown to an estimated $156 billion in 2020.
  • Payment cards are overwhelmingly the preferred e-commerce payment method, but digital wallets are growing in popularity for online purchases.
  • At around 6.2 cards per adult at the end of 2020, the country has one of the world's highest card penetration rates.
  • Consumers have been shifting their card spend from credit cards to debit cards due to regulatory measures promoting debit card usage.
  • Growth in mobile proximity and P2P payments have been in the high double to triple digits in recent years.
  • The credit cards market has maintained a healthy profit pool despite the fallout from the pandemic.
  • Mastercard is the largest credit card network in South Korea, followed by Visa, UnionPay and American Express.
  • The cards market operates predominantly as a three-party system, but BC Card, a joint venture among a number of banks, is an exception as it effectively operates as a four-party system.

South Korea Payments Research | Report Contents

Key Topics
Demographics and the economy
Payments environment
South Korea cards market
Mobile payments
Profit pool
The networks
Key retail banks and issuers
Acquiring and processing
Online acquiring
Regulatory and other cards market information

Appendices: Card Payments Data

Appendix I: Demographics and the economy

  • Demographic and economic indicators
  • Ownership of key consumer devices
  • Internet usage by population

Appendix II: Payments environment

  • Access points
  • Account penetration
  • Consumer payment trends
  • B2C e-commerce payment methods

Appendix III: Cards market data

  • Total cards payment metrics
  • Contactless cards metrics
  • South Korea credit card data
  • Total credit cards metrics
  • Credit cards profitability indicators
  • Debit cards numbers
  • Debit cards metrics
  • Prepaid/e-money cards metrics

Appendix IV: Mobile payments data

  • Mobile P2P payments

Appendix V: Profit pool

  • Profit pool

Appendix VI: Card networks

  • Networks' credit card market shares
  • Networks' credit card numbers
  • Networks' credit card billed volume
  • Networks' number of credit card transactions
  • Networks' average credit card transaction value
  • Credit card interchange fees by network
  • Networks' debit card market shares
  • Networks' debit card numbers
  • Networks' debit card billed volume
  • Networks' number of debit card transactions
  • Networks' average debit card transaction value
  • Debit card interchange fees by network (signature debit cards: exempt)
  • Debit card interchange fees by network (signature and PIN debit cards: regulated)

Appendix VII: Key retail banks and issuers

  • Key credit card issuers market shares by credit card numbers
  • Key issuers market shares in credit card outstandings
  • Key debit card issuers market shares by debit card numbers

Appendix VIII: Acquirers and processing

  • Merchant acquirer credit card market share
  • Credit card merchant service charges
  • Merchant acquirer debit card market share
  • Debit card merchant service charges
  • Credit card issuer/issuing processor relationships
  • Credit card acquirer/acquiring processor relationships
  • Credit card issuing processor market shares by card numbers
  • Credit card acquiring processor market shares by the number of POS transactions

Appendix IX: Online acquiring data

  • Online merchant acquirer market share

South Korea Country Report | Selected Extracts


Demographics and Economy:
Currently the fourth-largest economy in Asia after China, Japan and India, South Korea is facing a demographic challenge in the combination of a rapidly ageing population and a low birth rate that falls, at 1.1 in 2020, well below the replacement level of 2.1.

Payments Environment:
The South Korean retail banking market is well developed, highly competitive and profitable. Falling under the jurisdiction of the prime minister, the Financial Services Commission (FSC) is the regulatory body responsible for financial policy.

Cards market:
South Korea has a mature payment cards market. At around 6.2 cards per adult at the end of 2020, the country has one of the world's highest card penetration rates.

Mobile Payments:
Being a technologically advanced nation, mobile banking and payment services have flourished in South Korea for many years ... in March 2019 by launching a mobile payment system called Zero Pay, which allows users to make payments by scanning a vendor's QR code.

Profit Pool:
The market for credit cards is exceptionally competitive in South Korea. In the last decade, it has moved from conventional segmentation (standard, gold and platinum products) to sophisticated marketing based on cardholders' specific needs and lifestyles.

Card Networks:
South Korea has one of the world's highest card penetration rates. With a population of circa 52 million, the country's payment cards market is highly penetrated: there were some 283 million credit and debit cards in total at the end of 2020: about six cards per adult.

Key Retail Banks and Issuers:
The top five players in the South Korea credit card market in terms of credit cards in issue are Shinhan Card, Lotte Card, KB Kookmin Card, the Industrial Bank of Korea (IBK) and Hyundai Card. As of the end of 2020, these five players account for some 47% of cards in issue.

Acquiring and Processing:
For the most part, there is no interchange in South Korea, and the credit cards market operates predominantly as a three-party system.

Online Acquiring:
Topped only by China and Japan, South Korea is the third-largest e-commerce market in the Asia-Pacific region and the seventh-largest retail e-commerce market worldwide.

Regulatory and Markets Information:
The government and central bank have been taking various initiatives to improve the standard of electronic payments in the country ... key strategic objectives of the initiative include enhancement of payment and settlement infrastructures, promotion of innovation in payment services and strengthening of central bank functions.

South Korea Payments Report | Entities Referenced

11st
11street
7-Eleven
American Express
Apple Pay
ATsolutions
Auction
B2B E-commerce Payment Systems
B2C E-commerce Payment Systems
Bank Bukopin
Bank Center-Credit
Bank of Korea Financial Wire Network
Bank Pay
BC Card
BC Pay
BharatQR
BOK-Wire+
Busan Bank
Buy the Way
Cashbee
CHAI
Cheque and Bill Clearing System
Choheung
Citibank
Commercial Bank of Korea
Community Credit Cooperative
Costco Korea
Coupang
CU
Cumberland Korea
Curve
Daegu Bank
Datacard Group
Datacard Maxsys
DFS
Diners Club
Discover
Doota
E-mart 24
Expace
Export Import Bank of Korea
Fair Trade Commission
Financial Services Commission
Financial Supervisory Service
Fitbit Pay
FSC
FSS
FTC
G Market
GE Consumer Finance
Giro System
Gmarket
Google Pay
GS
GS25
Hana
Hana Bank
Hana Financial Group
HanaPay
Hanil
Hashed
Homeplus
Hyundai
IBK
IBK 1st Lab
IBK Changgong
Iconloop
Industrial Bank of Korea
INICIS INIpay
Interbank Shared Network Systems
International Telecommunication Union
JCB
K Bank
Kakao
Kakao Bank
Kakao Pay
Kakao Taxi
KB Kookmin
KEB Hana Bank
KFTC
Kona I
Kookmin Card
Korbit
Korea Exchange Bank
Korea Financial Telecommunications and Clearings Institute
Korea Post
Korea Telecom
Korean Federation of Savings Banks
KSNET
KT
Kyongnam Bank
L Pay
LG Card
Liiv TalkTalk
Line Pay
Liverpool Football Club
Lone Star Funds
Lotte Card
Lotte Group
Lotte Shopping
Mastercard
Microsoft Garage
Ministop
Mobiletoong
Naver
Naver Pay
Nexon
NHN Entertainment
NongHyup
NongHyup Card
Octopus Cards
OKCashBag
Paybooc
Payco
POP
PT IBK
Retail Payment Systems
RPS
RuPay
Samsung Card
Samsung
Samsung Pay
SC First
Seoul Bank
Shinhan Bank
Shinsegae
SK
SoFi
SSG Pay
Standard Chartered
Starbucks
SudoPay
Terra Mobile Payment
T-money
Toss
Trustonic
Tufts University
UnionPay
Vinyl & Plastic
Visa
Viva Republica
Watson
We Make Price
WiBee Bank
Woori Bank
Woori Financial Group
Zero Pay

MORE ASIA-PACIFIC CARDS & PAYMENTS REPORTS

Verisk financial reports include detailed market and competitor intelligence on payments cards, e-money, acquiring, retail banking, and consumer credit in the Asia Pacific region. Analysts use primary and secondary source data and conduct in-depth interviews with senior industry executives and finance experts.

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