"The Trend Is Online Now"…40% of Credit Cards Issued Online in the First Half of This Year

Rapid Growth of Non-Face-to-Face Channels Due to COVID-19
Expected to Approach 50% by the End of This Year

[Asia Economy Reporter Ki Ha-young] The proportion of credit cards issued online in the first half of this year has exceeded 40%. At this pace, it is expected that nearly half of all new credit card issuances by the end of this year will be conducted online. While this is an irreversible trend, voices of concern are emerging within the card industry about dependency on big tech (large information and communication companies) platforms in conjunction with the increase in online issuance.

According to data compiled from seven specialized card companies on the 20th, the proportion of newly issued credit cards online in the first half of this year was 42.6%, an increase of 5.6 percentage points compared to the end of last year. At this rate, the share of new credit card issuances online is expected to approach 50% by the end of this year.

Over the past five years, the proportion of online credit card issuances has been on the rise. The share of online new issuances, which was only 6.3% in 2015, recorded double digits (12.7%) for the first time in 2017, then increased to 17.8% in 2018, 26.6% in 2019, and 37.0% in 2020.

In particular, online issuances surged last year as the non-face-to-face culture expanded due to COVID-19. The proportion of credit card applications through online channels last year increased by 10.4 percentage points compared to the previous year-end, marking the largest increase in the past five years.

As non-face-to-face issuances increase, the number of card solicitors responsible for offline issuance is rapidly declining. According to the Credit Finance Association, the number of card solicitors at the seven specialized card companies stood at 8,673 as of the end of July this year. This is a decrease of 544 (5.9%) from 9,217 at the end of last year. The number has been steadily declining since it fell below 10,000 last year. The number of card solicitors, which reached 20,289 in 2015, was recorded as 16,658 in 2017, 12,607 in 2018, 11,382 in 2019, and 9,217 in 2020, shrinking to about one-third over six years.

An industry insider said, "Due to COVID-19, face-to-face sales became difficult, leading to a decrease in those issuing cards offline such as card solicitors and banks. Although the proportion of online issuance in total new card issuances had been gradually increasing, COVID-19 accelerated this trend."

Online issuance channels include not only card company websites and applications (apps) but also portal sites like Naver and Daum, as well as big tech platforms such as Toss, Naver Pay, and Kakao Pay. Offline channels through card solicitors are illegal if they offer benefits exceeding 10% of the annual fee, but online channels can return benefits to customers up to 100% of the annual fee. This explains why online channel issuances are increasing, especially among the 20s and 30s age groups.

Card companies are marketing through online channels in partnership with big tech to attract new card issuances, but they are concerned about the growing influence of big tech platforms. It is known that in recent years, the proportion of credit cards issued through big tech platforms has grown to account for one-third of all online issuances.

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