BC Card Crossing the Financial Silk Road, Establishes Joint Venture in Kyrgyzstan

Active Support for Local Financial Innovation

On the 21st, in Bishkek, the capital of Kyrgyzstan, Choi Won-seok, President of BC Card (left), Kanikei Zamangulova, IPC Chairperson (center), and Jang Gil-dong, President of Smartro, took a commemorative photo after signing a shareholders' agreement (SHA) among the three companies for the establishment of a joint venture. (Photo by BC Card)

BC Card, the first in Korea to establish payment infrastructure in Central Asia, has set up a local joint venture with the state-owned payment operator under the Central Bank of Kyrgyzstan.

On the 23rd, BC Card announced that next month it will establish a card payment processing joint venture, 'BC Card Kyrgyzstan (hereinafter BCKG)', in Bishkek, the capital of Kyrgyzstan, together with the value-added network (VAN) operator 'Smartro' and Kyrgyzstan's state-owned payment operator 'IPC'.

They finalized the shareholder agreement (SHA) for the joint venture establishment on the 21st. BCKG's total capital is 1.044 billion Kyrgyzstani som (approximately 15.2 billion KRW), with BC Card holding 52.5%, and IPC and Smartro holding 30% and 17.5% respectively. This is the first outcome following the memorandum of understanding signed in May by the three companies under the support of both governments to advance financial infrastructure in Kyrgyzstan.

Previously, the Kyrgyzstan government has been actively promoting the card industry to formalize the underground economy, which accounts for about 72% of the GDP, under the '2018-2024 National Development Plan', aiming to increase tax revenue and accelerate economic advancement. The annual card transaction volume in Kyrgyzstan has been growing over 100% each year.

Nevertheless, Kyrgyzstan's payment infrastructure has been fragmented by banks, resulting in multiple terminals installed at a single merchant. Especially when the terminal-installing bank and the card-issuing bank differ, the process becomes complicated by partial reliance on international brand payment networks, leading to higher payment fees for merchants.

Banks also lacked incentives to expand merchants from a cost perspective relative to their own merchant scale. Consequently, as of the end of last year, only about 3% (around 13,000) of all merchants in the country accepted card payments.

The newly established BCKG will be the only specialized acquirer locally. Based on the technological capabilities and close cooperation of the three companies, it will play a key role in innovating Kyrgyzstan's payment infrastructure and revitalizing the card industry. It has also obtained all the essential licenses from local authorities.

Structure of the Kyrgyzstan Payment Market After the Launch of BCKG (Provided by BC Card)

BCKG will first build a unified payment system. Utilizing BC Card's global payment solution 'BAIS', it can process card transactions occurring locally as well as various easy payments such as QR and Near Field Communication (NFC) with minimal development. Additionally, through Smartro's POS terminal and application payment technology, it will provide customized payment environments tailored to the scale and conditions of each merchant.

Furthermore, as a specialized acquirer, it will perform all related tasks such as merchant recruitment and management, transaction authorization relay, slip acquisition, and settlement, and will also offer online payment gateway (PG) services to flexibly respond to the e-commerce environment.

Choi Won-seok, CEO of BC Card, said, "BCKG will serve as a foothold not only for payment innovation in Kyrgyzstan but also for the digital payment transition in neighboring Central Asian countries with similar cultures and environments. We will continue to actively contribute to digital financial innovation in Central Asia with the DNA of K-finance and world-class payment technology."

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