Bansa's Net Profit Last Year 104 Billion Won... 33.9% Decrease Compared to Previous Year

Operating Revenue Increased but Significant Rise in Operating Expenses
Financial Condition Stable... Assets 2.7 Trillion KRW, Up 14.1% YoY

[Asia Economy Reporter Kwangho Lee] Last year, the net profit of the 13 major Value-Added Network (VAN) companies amounted to 104 billion KRW, showing a sharp decline of 33.9% (53.4 billion KRW) compared to the previous year. Although operating revenue slightly increased, the net profit decreased due to a larger increase in operating expenses. The Financial Supervisory Service announced this on the 28th through the '2020 VAN Companies Operating Performance (Preliminary)' report.

VAN companies refer to firms that provide telecommunications services to approve and mediate payment settlements via credit cards, etc., based on contracts with card companies and merchants.

Operating revenue was 2.5424 trillion KRW, up 3.9% (95 billion KRW) from the previous year. This increase was influenced by the growth in electronic payment (PG) business revenue due to the expansion of online shopping transactions, with other business segment revenue rising to 1.3677 trillion KRW, a 19.2% (220.2 billion KRW) increase from the previous year.

Operating expenses were 2.387 trillion KRW, up 5.8% (131.6 billion KRW) from the previous year. Although product costs such as promotional expenses decreased compared to the previous year, other operating expenses increased by 15.5% (204.6 billion KRW) to 1.5284 trillion KRW due to increased representative merchant fees related to the PG business.

The financial condition was generally favorable. The assets of the 13 major VAN companies last year were 2.7153 trillion KRW, a 14.1% (335 billion KRW) increase from the end of the previous year. This was mainly due to an increase in current assets such as cash equivalents, which rose by 20.3% (311.9 billion KRW).

Liabilities also increased by 34.5% (297.1 billion KRW) from the end of the previous year to 1.1573 trillion KRW, influenced by an increase in current liabilities such as accounts payable (39.0%, 293.2 billion KRW). Capital rose by 2.5% (37.8 billion KRW) to 1.558 trillion KRW compared to the end of the previous year.

Meanwhile, the number of card transactions was 18.6 billion, down 1.1% (200 million) from the previous year. On the other hand, the number of merchants and terminals increased by 5.2% (140,000) and 7.0% (230,000) respectively, reaching 2.82 million and 3.6 million.

A Financial Supervisory Service official stated, "Due to changes in the payment environment such as merchant fee reductions and the expansion of non-face-to-face transactions, the profitability of the VAN sector has deteriorated, and efforts to diversify revenue sources are expected. We will monitor the impact of rapid changes in the payment market on the VAN industry and provide necessary support to enhance payment stability."

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