Corporate Card Sales Halted This Month Due to 0.5% Limit on Economic Benefits... 60 Types Affected

7 Major Credit Card Companies Suspend New Corporate Card Issuance
Mainly Mileage Cards and Premium Products

[Image source=Yonhap News]

[Asia Economy Reporter Ki Ha-young] From this month, as the benefits that credit card companies can provide to corporate members such as large corporations are limited to within 0.5% of card usage amount, the issuance of some corporate cards has been consecutively halted. This is interpreted as a process of reorganizing products that have excessively provided economic benefits to corporate members, mainly mileage cards and premium products.

According to the credit card industry on the 6th, the number of corporate cards discontinued by seven specialized credit card companies (Shinhan, Samsung, KB Kookmin, Hyundai, Lotte, Woori, Hana Card) from this month has been counted to reach 60 types. An average of 8.6 types per company. Sales are suspended only for new issuance to corporate members excluding individual business owners and small businesses, while renewal and reissuance are possible.

This is a measure according to the amendment of the Specialized Credit Finance Business Supervision Regulations implemented from this month. The main point is to limit economic benefits (such as additional services, fund contributions, cashback, etc.) to within 0.5% of the corporate member's card usage amount, within the range where the total revenue from the corporate member's card usage exceeds the total cost.

However, for small businesses, considering the small scale of the corporation, and for national and local governments, considering that revenue is adjusted through the national treasury, only the criterion that total revenue exceeds total cost was applied. Small businesses are those with an average annual sales of 12 billion KRW or less for manufacturing, etc., and 1 billion KRW or less for restaurants, etc.

Accordingly, it is analyzed that credit card companies are reorganizing products that have excessively provided economic benefits to corporate members. An industry official explained, "As the benefits that can be provided to corporate members are limited to 0.5%, products exceeding this cannot be sold anymore," adding, "Products that provided benefits exceeding 0.5% are also reducing benefits through changes in additional services and informing corporate members of this."

With this amendment to the credit finance business supervision regulations, credit card companies are expected to reduce marketing costs. Some point out that the corporate card market may become fixed according to the existing market share ranking. For companies with lower market share, it may become more difficult to secure new corporate members.

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