Card Industry "Capture the Local Currency Market"... 15 Trillion Won Scale This Year

13 Trillion Won in Local Love Gift Certificates Sold Last Year
Card Companies Provide Payment Networks... Expecting Increased Transactions and Potential Customer Attraction

[Asia Economy Reporter Ki Ha-young] As the issuance scale of local currencies usable only in specific regions continues to grow, credit card companies have also started targeting the local currency market.

According to the Ministry of the Interior and Safety on the 14th, the total amount of local love gift certificates sold by 230 local governments nationwide last year was 13.3 trillion won. This is 4.2 times the amount of the previous year and 35.9 times compared to 2018.

Local love gift certificates are local currencies that can only be used in specific regions. They were issued independently by some local governments, but since 2018, when the central government began supporting part of the issuance amount, the number of issuing local governments and the issuance scale have surged.

In particular, with increased government support due to the COVID-19 pandemic, 15 trillion won is expected to be issued this year. This is about 600 billion won more than the issuance scale last year.

Credit card companies are entering the local currency market by providing payment networks through business agreements with local governments. From the perspective of credit card companies, local currencies have the advantage of gaining a monopolistic position in the region, increasing payment amounts, and securing potential customers.

Shinhan, KB Kookmin, Hana, and NH Nonghyup Cards have already entered the local currency market. Shinhan Card partnered with the Korea Minting and Security Printing Corporation to launch the 'Naju Love Card,' a local currency for Naju. It also exclusively won the project to pay policy allowances in Seongnam City and operates the 'Seongnam Love Card.' KB Kookmin Card launched the 'Tamna Jeon' check card last month, which can be used with Jeju Island's local currency. It can be used at local currency affiliated stores in Jeju as well as at credit card affiliated stores nationwide. Hana Card is operating local currency products in partnership with eight local governments including Gimpo, Ulsan, Busan, and Sejong. NH Nonghyup Card, under Nonghyup Bank which is based on the local economy and distribution, has been continuously launching local currency products starting with Yeominjeon, Sejong City's local currency, in May.

An industry official said, "Local governments are increasing the issuance of local currencies to revitalize the local economy," adding, "From the perspective of credit card companies, by providing payment networks, they can increase card payment amounts and secure potential customer groups through check card usage, which is why they are entering the local currency business."

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