6 out of 9 credit card firms in Korea appoint new CEOs amid key business challenges
From left are Shinhan Card CEO Park Chang-hun, Hana Card CEO Sung Young-su, KB Kookmin Card CEO Kim Jae-kwan and NH NongHyup Card CEO Lee Min-kyung. Courtesy of each company
Six out of nine credit card companies in Korea have replaced their CEOs amid worsening internal and external business conditions, emphasizing the need for change, innovation and survival as key themes for 2025.
The new CEOs are Shinhan Card CEO Park Chang-hun, Hana Card CEO Sung Young-su, KB Kookmin Card CEO Kim Jae-kwan, NH NongHyup Card CEO Lee Min-kyung and Woori Card CEO Jin Seong-won.
Kim Yi-tae, the designated CEO of Samsung Card, is expected to officially take office in March.
Despite improved performances in 2024 compared to 2023, the CEO reshuffles are a result of the growing uncertainties in the current business environment.
Key challenges include the growing intensification of the "big blur" phenomenon, where the lines between financial and nonfinancial sectors are increasingly blurred, primarily due to heightened competition from information technology-based payment companies such as Naver Pay, Kakao Pay and Toss.
In addition, another soon-to-be-implemented reduction in credit card merchant fees is causing concerns about a likely decline in profits.
Merchant fees will be reduced on Feb. 14 by up to 0.1 percentage point, marking the first such decrease in card fees since 2022. A reduction in card fees negatively impacts one of the key revenue streams for credit card companies.
The Financial Services Commission estimates that the new reduction in merchant fees will lead to a decrease of approximately 300 billion won ($206 million) in annual merchant fee revenue.
In light of these challenges, the credit card industry is making changes by appointing new CEOs, aiming to drive transformation and innovation.
In his inaugural speech, Park Chang-hun, the new CEO of Shinhan Card, the country’s largest credit card firm, emphasized the importance of payment process innovation and expanding market position through payment competitiveness, which in turn leads to sustainable profitability.
“If we are to create something that will shake the market, the only key is to try many different things. It is difficult, but achieving this is innovation, and it is the reason we are here and a necessary condition for our survival,” he said.