Card Performance from February to May Down 2.1% Year-on-Year Due to COVID-19 Spread

Bank of Korea 'Domestic Payment Trends Since the Spread of COVID-19'

[Asia Economy Reporter Kim Eunbyeol] It has been revealed that the average daily usage amount of credit and debit cards decreased by 2.1% compared to the same period last year during the four months after the novel coronavirus disease (COVID-19) began to spread in earnest. The amount paid by card in industries such as travel, education, entertainment, and culture sharply declined, and in particular, the airline industry recorded a negative usage amount for the first time ever as already purchased airline tickets were canceled and refunded.

According to the "Domestic Payment Trends After the Spread of COVID-19" announced by the Bank of Korea on the 14th, the average daily payment card usage from February to May was 2.414 trillion KRW, down 2.1% compared to the same period last year. Negative payment card performance has been recorded three times in the past: during the credit card crisis (January to October 2004, -9.2%), the global financial crisis (January 2009, -0.9%), and differences in the number of holidays (October 2017, -5.0%).

From February to May, credit card usage amounted to 1.862 trillion KRW, down 3.8%, and debit card usage was 526 billion KRW, down 0.1%. On the other hand, prepaid cards surged by 892.6% to 24 billion KRW, supported by the use of emergency disaster relief funds.

By month, the increase in COVID-19 confirmed cases slowed and emergency disaster relief funds were distributed in May, resulting in a 0.9% increase, but March and April recorded decreases of -7.4% and -4.4%, respectively.

Looking at individual credit card usage by consumption type, non-face-to-face transactions such as e-commerce (+21.4%) increased compared to the same period last year due to preferences for contactless transactions and automatic payments, but most other industries decreased. In particular, travel (-80.2%), education (-22.6%), and entertainment and culture (-16.8%) sharply declined. In the airline industry, usage amount recorded a negative figure (-54.4 billion KRW from February to May) for the first time since payment card statistics began, due to a surge in refunds caused by reservation cancellations.

By region, all areas except the metropolitan area (+2.6%) decreased compared to the same period last year. Especially, Jeju (-21.1%), which was heavily affected by the travel industry slump, Daegu and Gyeongbuk (-14.2%), and Busan and Gyeongnam (-9.4%), where many COVID-19 cases were reported, showed large decreases.

By payment method, non-face-to-face payments using mobile devices averaged 820 billion KRW daily, increasing by 12.7% compared to the same period last year. In contrast, face-to-face payments averaged 1.425 trillion KRW daily, decreasing by 8.4%. Non-face-to-face payments include not only online shopping mall payments but also payments made through mobile devices without contact with terminals at the transaction site, such as taxi hailing and payment via apps.

Even in face-to-face payments, when classified by access devices to payment terminals (card terminals, QR codes, etc.), physical card presentation decreased (-10.2%), but mobile device contact increased (+9.1%). Among payments made via mobile devices and PCs (average 1 trillion KRW daily), the proportion of simple payment usage expanded, reaching 42.7% in May.

Meanwhile, from February to May, the average daily amount of account transfers through small-amount payment networks was 68 trillion KRW, up 13.9% compared to the same period last year. The increase was driven by preferences for non-face-to-face payments and inflows of funds for stock investment. During the same period, the amount of bill and check payments decreased by 1.8% to 17.3 trillion KRW.

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