Card Companies Propose Successive Win-Win Plans... This Time, Shinhan Card

Comprehensive Support Solution for Small Business Owners Announced
Introducing 400 Billion Won 'Win-Win Finance'
Includes Liquidity Support and Debt Burden Relief
Business Conditions Poor... "Need to Provide Opportunities Through Deregulation"

Lee Bok-hyun, Governor of the Financial Supervisory Service (right), attended the 'Small Business Together, Growth Solution' presentation event of Shinhan Card held on the 17th at the Shinhan Card headquarters in Jung-gu, Seoul, along with Moon Dong-kwon, President of Shinhan Card.

Following Woori Card, Hyundai Card, and Lotte Card, industry leader Shinhan Card is also introducing a win-win finance plan. Despite experiencing an unprecedented recession in the first quarter of this year, card companies are actively presenting win-win finance proposals amid an uncertain business environment. As merchant fees have been declining for over a decade, there are growing calls for securing additional revenue sources.

Win-win solutions with 400 billion KRW liquidity support and debt burden relief

On the 17th, Shinhan Card held an event at its headquarters in Jung-gu, Seoul, to announce the integrated solution 'MySHOP Together: Growth Solution with Small Business Owners' aimed at supporting small business owners in startup, commercial area analysis, marketing, and loan assistance. The initiative is intended to build solutions for small business owners and provide tailored information so that card companies and merchants can grow together.

Alongside this, Shinhan Card unveiled a 400 billion KRW win-win finance plan. The plan includes operating a comprehensive support program for startups, commercial areas, sales, and funding targeting small business owners. It also consists of liquidity support worth 250 billion KRW for financially vulnerable groups and debt burden relief measures totaling 150 billion KRW for vulnerable borrowers, including delinquency reduction and preferential interest rates on refinancing loans. Moon Dong-kwon, CEO of Shinhan Card, stated, "We hope that the win-win finance support plan, driven by data from our 30 million customer base and industry experience, will provide even a little help to small business owners and financially vulnerable groups," adding, "We will continue to faithfully fulfill our role as a corporate citizen."

Financial Supervisory Service Governor Lee Bok-hyun, who attended the event, said, "Until now, card companies have focused on expanding card members and usage amounts as the core of profit generation, paying attention to merchants only during recruitment and contract stages, while relatively neglecting post-management and support. Providing such solutions will be a new opportunity for mutual growth," and added, "There have been efforts for win-win finance mainly centered on banks, but recently card companies, capital companies, and insurers have actively participated, for which we are grateful. The Financial Supervisory Service will also actively support efforts for mutual growth."

Uncertain business environment... Need to ease pressure as well as open new paths

This is not the first time card companies have introduced win-win plans. On the 29th of last month, Woori Card became the first in the industry to present a 220 billion KRW support plan targeting small card merchants and vulnerable groups. Following that, Hyundai Card and Lotte Card unveiled financial support measures worth 400 billion KRW and 310 billion KRW, respectively, for financially marginalized groups earlier this month.

Their win-win plans mainly consist of ▲providing low-interest refinancing loan products ▲supporting debt normalization ▲offering new loans ▲discounts on card payments and cash refunds for small merchants ▲providing automobile purchase financing, among others. Rather than incurring new costs, these measures involve foregoing expected future revenues. This is because the entire card industry is experiencing poor performance, and the timing for business environment improvement remains uncertain.

In fact, the seven full-service card companies recorded their worst performances in the first quarter of this year. Industry leader Shinhan Card posted the best result with a 5.3% decrease in net profit compared to the same period last year. Hyundai Card, which announced a win-win finance plan, saw its net profit decline by 7.9% during the same period. Lotte Card (-40.5%) and Woori Card (-46.4%) also experienced nearly a 50% drop in net profit compared to the first quarter of last year. Samsung Card (-9.5%) and KB Kookmin Card (-31%), which have yet to announce win-win plans, also reported poor results.

As the management environment is expected to remain uncertain due to funding cost burdens and reductions in merchant fee rates, there are calls for authorities to provide not only pressure but also some form of escape route. Seo Ji-yong, president of the Korea Credit Card Association and professor of business administration at Sangmyung University, explained, "Support such as card usage discounts or preferential interest rates for vulnerable borrowers and commercial area analysis are measures that have been implemented in the past," adding, "As regulatory easing measures such as allowing entry into comprehensive payment services are introduced, it is necessary for authorities and card companies to consult smoothly."

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