Due to COVID-19... March Card Approval Growth Rate Hits Lowest Since 2008 Financial Crisis

Korea Financial Investment Association
'Analysis of Card Approval Performance in Q1 2020'

[Asia Economy Reporter Ki Ha-young] Due to the impact of the novel coronavirus infection (COVID-19), the monthly growth rate of card approval amounts in March recorded the lowest level since the 2008 financial crisis.

According to the '2020 Q1 Card Approval Performance Analysis' released by the Credit Finance Association on the 28th, the total card approval amount in March decreased by 4.3% compared to the previous year. This was due to reduced card sales as social distancing measures were strengthened amid the spread of COVID-19. The monthly growth rate of total card approval amounts increased by 5.8% in January and 6.5% in February this year, but turned to a decline in March.

The card approval amount for the first quarter of this year was 205.8 trillion won, increasing by only 2.5% compared to the same period last year. The number of approvals was 5.04 billion, up 2.2%.

By industry, the card approval performance in the transportation sector for the first quarter decreased by 39.9% compared to the previous year. This was due to reduced use of airlines, railroads, and other transportation as people refrained from traveling. Due to sluggish sales in travel-related services, card approval performance in business facility management and business support services also dropped by 36.7%.

Due to academy closures and delays in school openings at all levels, card performance in the education services sector decreased by 15.2% compared to the previous year. The use of multi-use facilities such as museums, botanical gardens, theme parks, and karaoke rooms declined, causing the arts and sports service sector to decrease by 6.6% compared to the previous year.

The Credit Finance Association analyzed, "While domestic economic activities and consumer sentiment have contracted due to the impact of COVID-19, demand for purchases through online channels increased, but offline-centered sales decreased. Notably, sales in retail-related sectors such as department stores and discount stores, transportation and accommodation sectors related to travel, and gathering and leisure-related sectors such as restaurants and movie theaters declined, slowing the growth of card approval amounts."

This content was produced with the assistance of AI translation services.