"200 Types Discontinued This Year Again"... 600 Types of Cards Discontinued Over 3 Years (Comprehensive)

Profitability Declines Due to Fee Rate Reduction
Issuance Halted for Cost-Cutting Reasons
Includes Steady Sellers and Prime Cards
New Cards Increased but Benefits Disappoint

[Asia Economy Reporter Ki Ha-young] #. Office worker Kim Seo-yeon (35) recently found that her well-used NH All One Syrup Card had expired, so she is looking for a new card. This card, a product jointly launched by SK Planet and NH Nonghyup Card, was considered a generous card as it provided mobile gift certificates worth 50,000 KRW for every 1 million KRW spent monthly, up to a maximum of 100,000 KRW. Since the card has already been discontinued and cannot be reissued, she is searching for a new card, but none have caught her eye. Kim said, "It's not easy to find a card with benefits as good as before," adding, "These days, using local currency gives a 10% discount, so I'm thinking of using local currency instead of getting a new card."

About 600 types of cards have disappeared from the market over the past three years. Since the fee rate was recalculated in 2018 and further reductions in fee rates led to deteriorating profitability, card companies have stopped issuing existing cards to cut costs. Among the discontinued cards were steady sellers and so-called premium cards, raising concerns that consumer benefits are gradually decreasing.

According to the card industry on the 22nd, as of the 15th, a total of 192 discontinued cards (143 credit cards and 49 check cards) were recorded this year from eight major card companies (Shinhan, Samsung, KB Kookmin, Hyundai, Lotte, Woori, Hana, BC). This number is close to last year's 202 discontinued cards (157 credit cards and 45 check cards).

Every year for the past three years, about 200 types of cards have disappeared from the market. Especially, the number of discontinued cards has increased in connection with the reduction of merchant fees. The number of discontinued credit and check cards was 93 in 2017, 100 in 2018, and jumped to 202 each in 2019 and last year, nearly doubling since the merchant fee reduction was applied in 2019.

The discontinued cards included long-loved steady sellers and premium cards. Shinhan Card stopped selling the "Lady Card," which was launched during the LG Card era and had been popular for 20 years, in July. Last year, the "Emart KB Kookmin Card," popular as a so-called "gulbi card" sharing performance and annual fees with other cards, and the "Payco X Lotte Card," which could accumulate up to 300,000 points per month, were discontinued, causing disappointment among consumers.

On the other hand, a total of 232 new cards (199 credit cards and 33 check cards) were issued this year, the highest number of new products released in the past five years. The number of new credit and check cards was 165 in 2017, 131 in 2018, 91 in 2019, and 183 in 2020, showing an increasing trend again since last year. Although products reflecting the latest trends such as private label credit cards (PLCC) are being launched according to changes in consumption patterns, consumers have expressed dissatisfaction that the revamped cards offer fewer benefits than before.

The number of discontinued cards is likely to increase if merchant fees are further reduced

The trend of card discontinuation is rooted in deteriorating profitability due to reductions in merchant fees, which is the core business. According to the Financial Supervisory Service's Financial Statistics Information System, the merchant fee revenue of the eight major card companies, which was their main source of income, recorded 3.7359 trillion KRW cumulatively in the second quarter of this year. This is nearly half of the 5.9543 trillion KRW recorded cumulatively in the second quarter of 2018 before the merchant fee adjustment.

Discontinued cards are expected to increase further, and consumer benefits are likely to decrease. This is because there is a strong possibility of additional reductions in merchant fee rates in the fee rate recalculation scheduled for the end of this year. Since last year, the introduction of the "Profitability Analysis System Guideline," which allows card companies to release only products that can generate profits over the next five years based on profitability analysis, has also discouraged the launch of high-cost, high-benefit cards.

An industry insider said, "If merchant fees are reduced again, card companies will have no choice but to cut costs," adding, "Ultimately, this means that the benefits returned to consumers, such as card perks, will decrease."

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