"Market Share Gap Doubles"…Card Industry, Growing Divide Between Large and Small-Medium Companies (Comprehensive)

Shinhan Card Leads with 21.25%
Samsung, Kookmin, Hyundai Fiercely Compete for 2nd Place
Survival Concerns for Small and Medium Firms... Critical Digital Transformation

[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, the polarization of market share between large and small-to-medium card companies deepened last year in the third quarter based on personal and corporate credit sales (excluding corporate purchases) of seven specialized card companies (Shinhan, Samsung, KB Kookmin, Hyundai, Lotte, Woori, and Hana Card).

Shinhan Card maintained its unshakable 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.

Concerns Over Survival of Small and Medium-Sized Companies... Digital Transformation Is Crucial

On the other hand, the market share gap between small and medium-sized card companies such as Lotte, Woori, and Hana Card and large card companies is widening further. Lotte Card's credit sales market share during the same period 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 the novel coronavirus disease (COVID-19), the upcoming cycle for re-evaluating merchant fee rates, and fierce competition from big tech (large information and communication companies) platform companies.

Accordingly, small and medium-sized companies have collectively emphasized digital transformation as a leap forward 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, which welcomed Kim Jeong-gi 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.