Mobile Cards Once Ignored... Will They Succeed This Time?

Initial Box Office Failure in 2015 Release
New Product Launch This Year Aligned with Untact Consumption Trends

[Asia Economy Reporter Ki Ha-young] The industry is closely watching whether mobile cards, which are registered and used on smartphones without issuing a physical card, will succeed. This is because card companies in the past launched them ambitiously but received results below expectations. This year, with enhanced benefits for easy payments and online shopping in line with the untact (contactless) trend, there is speculation that the outcome could be completely different. The spread of untact consumption due to the impact of the novel coronavirus disease (COVID-19) is also a variable.

According to the card industry on the 14th, Hana Card's mobile-only card "Modu-ui Shopping," launched on May 19, was issued 50,000 cards in about 40 days after its release. Modu-ui Shopping provides basic benefits of 5-10% points accumulation in online and offline shopping sectors. It is analyzed that strengthening online shopping benefits was effective as untact consumption increased due to COVID-19. In fact, Modu-ui Shopping newly entered the top 30 in the "Top 10 Popular Credit Cards in the First Half of 2020" announced by Card Gorilla, the largest credit card specialist site in Korea.

This year, card companies are successively launching mobile-only products. This is to target online consumers in line with the spread of untact consumption. Shinhan Card introduced the mobile-exclusive card "Shinhan Card YaY" at the end of May. It features benefits optimized for the home economy (home + economy) and untact consumption market. KB Kookmin Card also launched the "KB My Fit Card," equipped with benefits such as easy payment, coffee, shopping, and delivery, tailored to the main customer age group of mobile-only cards, the 20s and 30s generation.

In particular, the industry is paying attention to whether the popularity of Modu-ui Shopping, which is enjoying initial success, will continue. This is because mobile cards ambitiously launched by card companies riding the fintech wave in 2015 all failed to gain popularity. Mobile cards introduced by Shinhan Card, KB Kookmin, BC, and Hana Card failed to differentiate from physical cards and were ignored by consumers. They were difficult to use in offline stores, and with the introduction of Samsung Pay in the second half of 2015, they failed to captivate consumers.

The market expects that the real success or failure will be known after the booster event commemorating the launch of Modu-ui Shopping ends. Hana Card is currently running an event until the end of this month that accumulates a total of 60%, including an additional 50%, up to a maximum of 60,000 Hana Money points for online shopping.

There is also a view that mobile cards launched this year will be different from those in 2015 because they focus on untact consumption and strengthen online benefits. According to the "May 2020 Online Shopping Trends" announced by Statistics Korea, online shopping transaction amount in May was 12.7221 trillion KRW, an increase of 13.1% compared to a year ago. Among them, mobile shopping recorded 8.6944 trillion KRW, up 21.0%. This is the highest since Statistics Korea began compiling related statistics in 2013. Furthermore, since mobile-only cards can be used without any restrictions in offline stores when using Samsung Pay, the situation is considered to have changed.

An industry official said, "Mobile cards have been on the market since 2015," adding, "Since products differentiated with easy payment and online shopping benefits have been launched according to the untact consumption trend, if mobile cards succeed this time, it is likely that follow-up cards will be released one after another."

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