"Blaming COVID-19, Online Card Transactions Rise"…Card Approval Amounts Up 5.4% in Q3 This Year

Korea Financial Investment Association Announces 2020 3Q Card Approval Performance
Increase in Contactless and Online Shopping
Approval Amount Up 5.4% Year-on-Year

On the 26th, when the discount event "Korea Together Sale," planned to overcome the economic crisis caused by COVID-19 and promote consumption, began, Mangwon Market in Seoul was bustling with citizens. This Together Sale, in which all economic entities including traditional markets, neighborhood supermarkets, department stores, and large marts participate by offering gift certificates and discount events, will be held for 17 days until the 12th of next month. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Ki Ha-young] Despite the prolonged COVID-19 pandemic, consumer spending appears to be recovering. It is evaluated that the increase in non-face-to-face and online shopping has offset the decline in offline consumption.

According to the Credit Finance Association on the 5th, the total card approval amount in the third quarter of this year was 228.4 trillion KRW, an increase of 5.4% compared to the previous year. The number of approvals also recorded 5.65 billion transactions, up 0.3% from the previous year.

Although there were concerns about a contraction in consumption due to the impact of COVID-19, it is assessed that the recovery trend in consumer spending is continuing. In fact, the quarterly approval amount growth rate has also been increasing. It recorded 2.5% in the first quarter when COVID-19 began to spread, followed by 3.9% in the second quarter and 5.4% in the third quarter.

This increase in approval performance is interpreted as being due to the steady growth of non-face-to-face and online shopping. However, sales declines continue in offline retail sectors such as department stores, transportation and accommodation industries related to travel and movement, and sectors highly related to outdoor activities such as restaurants and movie theaters.

In fact, wholesale and retail industries saw about a 15.5% increase compared to the previous year, as the rise in non-face-to-face and online purchases and automobile sales offset the decline in offline-related sales. On the other hand, transportation, accommodation and food services, business facility management and business support services, and education services decreased. Transportation sharply dropped by 56.5% year-on-year due to reduced use of transportation means such as airlines and railroads, and business facility management and business support services fell by 39.5% due to poor sales in travel-related services including travel agencies. Accommodation and food services also decreased by 9.2% year-on-year due to reduced travel, movement, and external gatherings, and education services declined by 11.3% due to factors such as the reduction of academy operations.

Meanwhile, individual cards also saw increases in both approval amounts and the number of approvals in the third quarter of this year compared to the previous year. The approval amount was 188.2 trillion KRW, up 5.3% year-on-year, and the number of approvals increased by 0.3% to 5.32 billion transactions.

During the same period, corporate cards showed an increase in approval amounts but a decrease in the number of approvals. The corporate card approval amount in the third quarter of this year was 40.4 trillion KRW, up 5.9% year-on-year, but the number of approvals decreased by 0.6% to 340 million transactions.

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