"3Gao Crisis Separates the Wheat from the Chaff"... Card Industry Stakes Survival from New Year

Heads of Card Companies Urge Growth Amid Crisis
Moon Dong-kwon, Shinhan Card CEO, "Differentiated Growth Needed in Crisis"
KB, Samsung, and Others Also Call for Solid Management and Flexible Response

Moon Dong-kwon, new president of Shinhan Card (Photo by Shinhan Card)

[Asia Economy Reporter Minwoo Lee] Heads of the card industry urged growth for survival amid crisis. With difficulties such as merchant fee reductions and tightening capital markets, fierce competition with big tech companies makes finding new opportunities essential.

On the 3rd, according to the card industry, Moon Dong-kwon, the new CEO of Shinhan Card, ordered differentiated growth during his inauguration ceremony at the headquarters in Jung-gu, Seoul, emphasizing the crisis era marked by the three highs: high interest rates, high inflation, and high exchange rates. Moon said, "In the midst of crisis, we must make this year a year of greater growth and leap through ‘customer-centered’ innovation," adding, "Based on the synergy of the Shinhan network, Shinhan Card must evolve into a unique lifestyle financial platform company that provides greater value to customers and society beyond the card business through differentiated growth."

Moon’s management keywords are the three Xs (eXperience): ▲Customer-Centered Digital (CX) ▲Sustainable Management (BX) ▲Future Shinhan Culture (WX). He emphasized the need to present differentiated customer experiences through the capabilities of the top card operator with vast customer data and linkage with Shinhan Financial Group.

Other card company leaders also urged quick responses amid challenging management conditions, calling for sound management and growth. Lee Chang-kwon, CEO of KB Kookmin Card, said in his New Year’s message, "Due to the prolonged ‘three highs’ phenomenon and the possibility of an economic recession, this year’s management environment is likely to face unprecedented crises," and urged, "A structural improvement and solid growth are essential, and the organization must transform into a flexible and fast-moving one."

Kim Dae-hwan, CEO of Samsung Card, also said, "In 2023, amid concerns over a global economic recession, the difficult environment of high inflation and high interest rates will continue, unlike anything experienced in recent years," adding, "Moreover, the platform and data era brought by digital innovation is triggering structural changes in all industries, demanding swift responses."

The card industry’s resolute stance is due to the expectation that the series of adverse conditions that continued last year will persist this year. Last year, card companies suffered profitability deterioration due to lowered merchant fees. The capital market froze amid the base rate hike rally, making fund procurement difficult. They already implemented voluntary retirement and reduced the supply scale of loan products such as auto installment loans and card loans to cope with this situation. Even during the year-end when consumption increases, they cut back on various interest-free installment benefits and discount events.

The outlook for this year is not very bright either. To compete in the ‘pay war’ with big tech companies like Naver and Kakao, card companies launched the joint simple payment service ‘Open Pay’ at the end of last year, but the response has been minimal so far. Among major card companies, only Shinhan, KB Kookmin, and Hana Card have participated. Lotte Card, BC Card, and NH Nonghyup Card are scheduled to join sequentially, but considering the big tech companies’ simple payment services as well as Samsung Pay and the soon-to-be-introduced Apple Pay, it is expected to be difficult to secure competitiveness.

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