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.
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.
TABLE OF CONTENTS
Demographics and the economy
South Korea cards market
Key retail banks and issuers
Acquiring and processing
Regulatory and other cards market information
Appendices: Card Payments Data
Appendix I: Demographics and the economy
Appendix II: Payments environment
Appendix III: Cards market data
Appendix IV: Mobile payments data
Appendix V: Profit pool
Appendix VI: Card networks
Appendix VII: Key retail banks and issuers
Appendix VIII: Acquirers and processing
Appendix IX: Online acquiring data
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.
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.
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.
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.
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.
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.
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.
B2B E-commerce Payment Systems
B2C E-commerce Payment Systems
Bank of Korea Financial Wire Network
Buy the Way
Cheque and Bill Clearing System
Commercial Bank of Korea
Community Credit Cooperative
Export Import Bank of Korea
Fair Trade Commission
Financial Services Commission
Financial Supervisory Service
GE Consumer Finance
Hana Financial Group
IBK 1st Lab
Industrial Bank of Korea
Interbank Shared Network Systems
International Telecommunication Union
KEB Hana Bank
Korea Exchange Bank
Korea Financial Telecommunications and Clearings Institute
Korean Federation of Savings Banks
Liverpool Football Club
Lone Star Funds
Retail Payment Systems
Terra Mobile Payment
Vinyl & Plastic
We Make Price
Woori Financial Group
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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