COVID-19 Drives Online Shopping Growth... Last Year's E-commerce Card Payments Surpass 100 Trillion Won

Annual E-commerce and Mail-order Card Payments Exceed 100 Trillion Won for the First Time Since December 2009

[Image source=EPA Yonhap News]

[Asia Economy Reporter Kim Eunbyeol] As the proportion of non-face-to-face transactions significantly increased due to the spread of COVID-19, the amount of credit card payments for e-commerce exceeded 100 trillion won for the first time last year.

According to the Bank of Korea on the 17th, the nationwide personal credit card payment amount for e-commerce and telecommunication sales last year was 116.3251 trillion won. This is the first time since the Bank of Korea began compiling related statistics in December 2009 that the annual nationwide credit card payment amount for e-commerce and telecommunication sales exceeded 100 trillion won.

With the development of simple payment systems, credit card payments for e-commerce and telecommunication sales have been continuously increasing. In particular, in 2016 (+25.01%, 51.67 trillion won) and 2017 (+25.02%, 64.5959 trillion won), the amount surged by more than 10 trillion won annually. Last year, due to the spread of COVID-19 reducing face-to-face transactions, the growth rate reached nearly 25% for the first time in three years.

Looking at the monthly data, in September last year (10.2943 trillion won), the monthly amount exceeded 10 trillion won for the first time, and in December last year (11.4122 trillion won), it surpassed 11 trillion won. A Bank of Korea official explained, "A significant portion of non-face-to-face transactions can be considered e-commerce through online shopping malls, etc."

On the other hand, duty-free shop consumption was hit hard as travel was restricted due to COVID-19. The nationwide personal credit card payment amount at duty-free shops last year was 555.4 billion won, which is only a quarter of the amount from a year earlier (2.1947 trillion won). This was the largest decline rate ever recorded (-74.7%).

Meanwhile, due to the impact of COVID-19, the average daily credit card payment amount decreased last year, and the growth rate of card payments also sharply declined. The scale of card usage last year was 2.521 trillion won per day on average, an increase of 0.6% compared to the previous year. The growth rate of card payments significantly decreased compared to previous years such as 2018 (6.2%) and 2019 (5.8%). The average daily credit card payment amount was 1.961 trillion won, marking a 0.3% decrease. Historically, the credit card usage amount decreased compared to the previous year only three times: in 1998 (-9.1%), 2003 (-22.2%), and 2004 (-26.8%), indicating that the consumption contraction shock caused by the spread of COVID-19 was significant.

The proportion of non-face-to-face payments among total payments has continuously expanded, reaching 39.6% in the fourth quarter of last year, approaching 40%. While non-face-to-face payments were at about 32.2% in the first quarter of 2019, they rapidly increased to 36.4% in the first quarter of 2020 and 39.6% at the end of last year.

The proportion of simple payments among mobile device payments gradually increased from 32.4% in the first quarter of 2019 to 41.5% at the end of last year. Among simple payments, the share of fintech companies expanded further to 61.7% in the fourth quarter of last year since 2020. Simple payment services refer to services where card information is pre-stored on mobile devices, etc., and payments are made using simple authentication methods (such as password input, fingerprint recognition) during transactions.

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