Do not go gentle into that good night, old age should burn and rave at close of day; Rage, rage against the dying of the light, though wise men at their end know dark is right, because their words had forked no lightning they, do not go gentle into that good night.
Card industry faces tectonic shift
By Jhoo Dong-chan
By Jhoo Dong-chan
The nation's credit card industry has been bisected by Shinhan and KB Kookmin Card, but is expected to experience a major upheaval soon due to Costco's new partnership with Hyundai Card and a possible merger between card firms.
Shinhan Card is likely to maintain its market leader position in terms of total assets for a while, but runner-up KB Kookmin Card may slide to the No. 3 position if second-tier card firms merge.
The nation's third-largest card firm Samsung Card is also showing signs of a slowdown while the fourth, Hyundai Card, is likely to enjoy strong earnings this year thanks to its exclusive partnership with giant retailer Costco.
The U.S. warehouse chain has adhered strictly to a policy of forging a partnership with only one credit card company to keep the interchange rate low so that it can sell products at a low price near their wholesale value.
Samsung Card had been the only credit card customers could use at Costco branches across the country for the past 18 years, but the retail giant changed its exclusive credit card partner firm to Hyundai Card last year.
On May 24, Costco started allowing only Hyundai Card cardholders to pay via credit card at its branches.
According to the Financial Supervisory Service, Costco's sales reached 3.92 trillion won ($3.29 billion) here last year. Considering 70 percent of customers' payments are made via credit cards at the nation's super market chains, customers paid 2.74 trillion won via credit cards at Costco branches last year.
Hyundai Card is expected to enjoy at least 50 billion won worth of annual credit card transaction fees through its exclusive payment partnership with Costco.
“It will provide a catalyst for Hyundai Card to gain a higher market share,” said an industry source familiar with the issue asking not to be named.
“Samsung lost the deal as part of a transition the company is going through in trying to find new sources of growth.”
On May 21, Lotte Group changed the preferred bidder for Lotte Card to a consortium led by MBK Partners-Woori Bank due to the accusation made against CEO of Hahn & Company by KT labor union.
Hahn & Company has reportedly valued Lotte Card at roughly 1.8 trillion won, and said it was willing to acquire an 80 percent stake in the firm.
The MBK Partners-Woori Bank consortium offered a similar price and terms as Hahn & Company. Lotte Group is also required to conclude the sale of its card unit by October to meet the country's non-financial holding structure guidelines under the fair trade law.
It is almost certain MBK Partners will sell the card firm at some point in the future, and observers claim Woori could be a possible candidate to acquire it at that time.
If Woori Card acquires Lotte Card, the credit card unit of Woori Financial Group will have the nation's second-largest credit card firm with total assets of 22.6 trillion won.
However, a Woori Bank official denied this.
“Woori joined the consortium as an investor. We do not review our option to acquire the card firm anytime in the future,” an Woori Financial Group official said.