Card Company Market Share, Gap Between Large and Small-Medium Firms Widens Further

3x Gap in Market Share Between 1st and 7th
Growing Influence of Simple Payment Providers
Shakes Position of Small and Mid-Sized Card Companies

[Asia Economy Reporter Ki Ha-young] The gap in market share between large and small-to-medium-sized credit card companies has become more entrenched. While the second-tier card companies narrowed the gap with the top company this year, the mid- and lower-tier card companies struggled as they lost market share. Additionally, concerns are rising that the position of small-to-medium-sized card companies will further shrink as big tech companies leverage easy payment services to expand transaction volumes.

According to the Financial Supervisory Service's Financial Statistics Information System on the 27th, the market share gap between Shinhan Card, the top-ranked card company, and Hana Card, ranked seventh, among the seven specialized card companies (Shinhan, Samsung, KB Kookmin, Hyundai, Lotte, Woori, Hana) based on total credit sales (excluding corporate purchases) in the third quarter of this year is about threefold.

Shinhan Card maintained its unshakable first place with a market share of 21.45% in the third quarter. Samsung Card’s strong performance stands out in the ongoing competition for second place. Samsung Card, which has solidified its second place by increasing personal credit sales this year, recorded a market share of 18.96%, narrowing the gap with the first place to 2.49 percentage points. This is 0.18 percentage points closer than the gap in the second quarter, which was the lowest since the first quarter of 2017. KB Kookmin Card and Hyundai Card maintained third and fourth places with 17.59% and 16.51%, respectively.

For small-to-medium-sized card companies such as Lotte, Woori, and Hana Card, rankings remained the same but market shares declined. Hana Card, ranked seventh, showed the largest decrease among the seven specialized card companies, dropping 0.6 percentage points from the previous quarter to 7.26%. During the same period, Lotte Card’s market share fell by 0.05 percentage points to 9.34%, maintaining fifth place, while Woori Card rose 0.12 percentage points to 8.89%, holding sixth place.

This market share gap, ranging from at least twice to up to three times, appears to be solidifying year by year. The polarization among card companies is intensifying. Moreover, big tech companies like Naver Pay and Kakao Pay are expanding their influence centered on easy payment services, shaking the position of small-to-medium-sized card companies. According to Korea Credit Rating, as of the third quarter, Naver Pay’s transaction volume (9.8 trillion KRW) approached the average transaction volume of small card companies (Lotte, Woori, Hana Card) at 10.7 trillion KRW. Woori Card’s plan to build its own merchant network and Lotte Card’s transformation into a digital company are interpreted as desperate attempts by small-to-medium-sized card companies to overcome this environment.

An industry insider said, "Credit card market share fluctuates greatly depending on marketing efforts. As the intensity of cutthroat competition has decreased compared to before, market shares have become entrenched, and the position of small-to-medium-sized card companies is becoming narrower."

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