Launching a Second Startup and Major Brand Transformation... Card Companies Facing Survival Crisis Bet on 'Innovation'

Rapid Changes in Payment Industry Environment
Big Tech Growth Surges, Card Companies' Position Declines

[Asia Economy Reporter Ki Ha-young] This year, credit card companies are undertaking major innovations for survival. Declaring a second founding and transforming their brand and product systems, they are renewing themselves to survive in the rapidly changing payment market.

According to the industry on the 4th, Samsung Card has revamped its brand and product system for the first time in 10 years. The 'practical' brand, represented by number cards over the past decade, has been changed to a 'preference' brand. This shift reflects the new consumption trend of 'value for heart and flex,' where consumers spend generously if it suits their tastes. Through the new brand, Samsung Card plans to offer opportunities to experience diverse preferences and provide products and services that bring satisfaction to consumption and life.

Earlier, industry leader Shinhan Card announced a blueprint to leap into a 'lifestyle finance platform' through the Shinhan Play Unpack Show at the end of September, declaring its second founding. Based on 30 million customers, it aims to become a life and finance platform company with an annual transaction volume of 200 trillion won. This is interpreted as an intention to evolve beyond simple credit card business into a platform company with competitiveness on par with big tech (large information technology companies).

BC Card is focusing on business diversification beyond payment processing services. Especially this year, it has put effort into launching its own credit card. Recently, it introduced a new type of card called the 'Individual Card,' which removes the basic benefits typically included at the time of card launch and offers specialized benefits through cards planned and operated directly by famous influencers.

The reason credit card companies are innovating like this is that their influence in the rapidly changing payment market is gradually decreasing. In contrast, big tech companies are significantly expanding their influence based on platforms. A representative example is the rapidly growing simple payment services. According to the Bank of Korea, the average daily payment amount of domestic simple payment services was 559 billion won in the first half of this year. Of this, big tech's average daily payment amount was 276.2 billion won (49.4%), while financial institutions such as banks and card companies accounted for only 159.1 billion won (28.5%).

Another reason is that revenue can no longer be guaranteed by card fees alone. With merchant fee rates lowered 13 times over 12 years, fee income is already in deficit. Although a fee revision plan is scheduled to be announced this month, the atmosphere favors further reductions.

An industry official said, "As big tech's influence grows and the payment market environment rapidly changes, the era when survival was possible solely through credit card business has passed," adding, "The rush to release products for the future potential customers, the MZ generation (Millennials + Generation Z), is in the same context."

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