Disaster Relief Fund Effect... Card Approval Amount Exceeds 222 Trillion in Q2

Goddess Finance Research Institute, '2020 2nd Quarter Card Approval Performance Analysis' Report

[Image source=Yonhap News]

[Asia Economy Reporter Oh Hyung-gil] Thanks to the effect of the emergency disaster relief fund, card approval performance in the second quarter of this year showed growth.

As consumer behavior changed due to the COVID-19 pandemic, there were mixed results across industries. The online shopping sector enjoyed a special boom, but travel, accommodation, and leisure-related industries showed sluggish performance.

On the 2nd, the Credit Finance Research Institute under the Credit Finance Association released a report titled "Analysis of Card Approval Performance in the Second Quarter of 2020" containing these details.

According to the report, the total approved amount during the second quarter of 2020 was 222.5 trillion KRW, an increase of 3.9% compared to the same period last year. The total number of card approvals was 5.61 billion, up 1.8% from the previous year.

The increase in card approval amounts is analyzed by the institute as reflecting a partial recovery in private consumption, supported by the resumption of economic activities and the emergency disaster relief fund.

Researcher Jang Myung-hyun of the Credit Finance Research Institute explained, "Starting from May, when the government's emergency disaster relief fund payments began, the approval amount shifted to an upward trend," adding, "Due to sporadic group infections of COVID-19, sales in retail-related sectors such as department stores, transportation and accommodation industries related to movement and travel, and gathering and leisure-related sectors like restaurants and cinemas continued to decline."

He further stated, "Sales declines in related industries such as airlines, railroads, and accommodations due to travel restraint also continued," and "On the other hand, the increase in online shopping was maintained, and automobile sales increased due to the effects of individual consumption tax cuts and new car launches."

The amount paid in wholesale and retail industries, which are closely related to consumer spending, increased by 16.1% compared to the same period last year, but the card approval amount in the transportation industry decreased by 64.0% year-on-year. This was due to reduced use of railroads and airlines amid the COVID-19 impact.

Due to sluggish sales in travel-related service industries, business facility management and business support services also decreased by 43.2%. Education services declined by 8.1% due to academy closures, and accommodation and food services also decreased by 6.8%.

The average card approval amount overall was 39,627 KRW, up 2.1% from the same period last year. The average approval amount for credit cards was 50,786 KRW, an increase of 1.1% year-on-year, and the average approval amount for check cards was 23,085 KRW, up 7.4% from the previous year. In contrast, the average approval amount for corporate cards was 116,781 KRW, down 1.9% year-on-year.

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