Polarization Deepens in Credit Card Market... Gap in Market Share Between Large and Small-Medium Companies '↑'

Shinhan Card Leads with 21.25%
Samsung, Kookmin, Hyundai Fiercely Compete for 2nd Place
Concerns Over Survival of Small and Medium Companies... Critical Shift to Digital

[Asia Economy Reporter Ki Ha-young] The market share gap in the credit card industry is widening further. As the business environment surrounding the card sector deteriorates, the market is rapidly reorganizing around large companies, raising concerns about the survival of small and medium-sized card companies.

According to the Financial Supervisory Service's Financial Statistics Information System on the 5th, among the seven specialized card companies (Shinhan, Samsung, KB Kookmin, Hyundai, Lotte, Woori, Hana Card), the polarization of market share between large and small-to-medium card companies based on personal and corporate credit sales (excluding corporate purchases) in the third quarter of last year has intensified.

Shinhan Card maintained its undisputed first place. Its market share slightly declined, recording 21.25%, down 0.08 percentage points from the previous quarter. The competition for second place among Samsung, KB Kookmin, and Hyundai Card remains fierce. Samsung Card rose 0.14 percentage points from the previous quarter to 18.3%, securing second place. KB Kookmin Card and Hyundai Card recorded 17.64% and 16.31%, down 0.28 and 0.29 percentage points respectively from the previous quarter.

As the competition for second place intensifies, the gap with the first place is narrowing. Samsung Card closely chased Shinhan Card with a 2.95 percentage point difference. In the second quarter, the gap was 3.17 percentage points.

Polarization of Market Share Between Large and Small-to-Medium Companies Deepens... Concerns Over Survival of Small Companies

Meanwhile, the market share gap between small-to-medium card companies such as Lotte, Woori, and Hana Card and large card companies is widening. Lotte Card's credit sales market share fell 0.03 percentage points from the previous quarter to 9.34%. It declined from 9.61% in the first quarter and 9.37% in the second quarter. Hana Card also recorded 7.73%, down 0.04 percentage points from the previous quarter, failing to escape the bottom rank. Hana Card's market share was 8.08% in the first quarter and 7.77% in the second quarter.

However, Woori Card's credit sales performance increased significantly. Woori Card's third-quarter credit sales market share rose 0.58 percentage points from the previous quarter to 9.43%, overtaking Lotte Card to rank fifth. Woori Card's market share has been increasing, recording 8.68% in the first quarter and 8.85% in the second quarter last year.

As market share concentrates around large companies, concerns about the survival of small and medium-sized companies are emerging. Especially this year, the business environment surrounding the card industry is expected to worsen compared to last year due to the possibility of a real economy recession caused by COVID-19, the upcoming cycle for reassessing merchant fee rates, and fierce competition from big tech platform companies.

Accordingly, small and medium-sized companies have collectively called for a leap toward becoming digital financial companies in their New Year's addresses this year. Lotte Card mentioned digital transformation as a survival task and declared, "We will establish a digital business model unique to Lotte Card." Woori Card, welcoming Kim Jung-ki as the new CEO this year, also urged to make 2021 "the first year to leap forward as a 'digital payment financial company'." Hana Card emphasized that it is time to transform from a traditional card company into a comprehensive digital payment company.

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