Park Jae-hyuk is a seasoned journalist who has provided comprehensive coverage of South Korea's corporate dynamics, economic policies, industry challenges and the global positioning of Korean companies. Based on the articles he has written since joining The Korea Times in 2016, his investigative approach has helped readers understand corporate governance, economic trends and business strategies shaping South Korea’s economy.
Card firms capitalize on relief money
gettyimagesbank
By Park Jae-hyuk
Cash provided as credit points except for Citi cards
By Park Jae-hyuk
Credit card companies are expected to take advantage of the emergency relief money which will be given to all 21.7 million households nationwide starting this month, while Citi has been excluded from the opportunity to attract more customers.
According to the Ministry of the Interior and Safety, Friday, 1 million won ($820) will be provided to households with four or more members, 800,000 won to three-person households, 600,000 won to two-person households and 400,000 won to single-person households, as part of the nation's efforts to cope with the economic fallout from the COVID-19 pandemic.
The ministry said the funding can be provided through credit and debit cards that recipients hold, not just through local governments-run gift vouchers and prepaid cards.
However, the money cannot be used with Citi's credit and debit cards.
“Points that can be used as cash will be loaded onto credit and debit cards,” an interior ministry official said. “Cards issued by Citi and several other card companies without cash-like point systems will not be used for the emergency relief money.”
Citi's credit cards have been available for the anti-disaster basic income that the Gyeonggi Provincial Government has given to all residents living in the province since April.
This was because Citi is one of the 13 card firms that signed agreements with the provincial government, which is giving money directly to card firms whenever their cards are used for the purpose of spending the anti-disaster basic income.
Because the central government took measures different to Gyeonggi Province Government, however, those who only hold Citi's cards will have to look for another way to receive the emergency relief money.
In contrast, card firms with a cash-like point systems will likely carry out various marketing campaigns to attract customers, as they did when the Gyeonggi government started giving the anti-disaster basic income.
Shinhan Card has offered up to 10,000 won “cashback” to its customers who spent over 10,000 won with its credit cards for the purpose of using the Gyeonggi Province's anti-disaster basic income.
Samsung Card has returned up to 10,000 won to customers who resumed using its credit cards for spending the province's anti-disaster basic income.
Hana Card has offered a 30 percent cashback to customers who used its credit cards for other purposes, on top of the use of the province's anti-disaster basic income.
Woori Card has given mobile vouchers for Starbucks' Americano coffee to customers who applied for the province's anti-disaster income through its credit cards.
“Amid the deteriorating industry outlook, the relief money will help us attract new customers and prompt our previous customers to resume using our cards,” a credit card industry official said.
According to the Financial Supervisory Service, the combined net income of the nation's eight leading card firms stood at 1.6 trillion won in 2019, down 5.3 percent from a year earlier.
The card firms have also faced difficulties in fundraising as the corporate bond market has been sluggish since the outbreak of the COVID-19 pandemic.