Financial firms rush to woo customers as cash handouts begin Monday

A man walks by a notice about the government's voucher-based cash handout program at a tire shop in Seoul, Saturday. Yonhap

All citizens in Korea will be eligible to receive voucher-based cash handouts starting Monday as part of a 12 trillion won ($8.7 billion) stimulus plan under the Lee Jae Myung administration.

The vouchers can be used via credit and debit cards, gift certificates and prepaid cards.

Commercial lenders, fintech companies, internet-only banks and credit card firms are rolling out aggressive marketing strategies to attract users.

The country’s five top banks — KB Kookmin, Shinhan, Hana, Woori and NH NongHyup — will accept applications for the vouchers at their branches nationwide.

Shinhan, Woori and NH NongHyup will offer application services via their banking apps.

The country’s three internet-only banks — KakaoBank, Kbank and Toss Bank — will accept applications online.

After reviewing the applications, a coupon amount will be credited to the user’s debit card account the following day. Only users that have a debit card in their own name will be eligible.

Similarly, applications can be filed with nine credit card issuers: Shinhan, Samsung, KB Kookmin, Hyundai, Lotte, Hana, Woori, BC and NH NongHyup.

Applicants can choose whether to receive the coupons via credit or debit cards, gift certificates or prepaid cards.

Fintech companies are also intensifying promotional campaigns.

Naver Pay is offering a “cashback” program wherein 0.3 percent of the coupon spending using a Naver-issued card will be given back as points.

For those without cards, Naver Money, a currency usable on the portal’s shopping malls via mobile phone, will be made available.

Kakao Pay offers up to 1.7 percent in rewards for using the vouchers in its system.

Toss was the first among fintech companies to launch a government-operated coupon notification service, active since July 14.

Card issuers are emphasizing the convenience of their services.

Shinhan Card is promoting its payment app Shinhan SOL Pay, through which users can find merchants that accept the coupons.

Samsung Card and KB Kookmin Card offer real-time updates on spending and balance through their apps and websites.

Various card issuers will credit parts of education spending on cram schools back to user accounts.

Many financial companies are also strengthening their digital infrastructure, launching new website features such as pop-up notifications about how to apply for the vouchers, the location of eligible merchants and other frequently asked questions.

They say handling an increase in web traffic will be a priority to prevent system malfunctions and failures that occurred during a similar program that was rolled out during the COVID-19 pandemic in 2020.

Back then, 60 percent of households applied for vouchers using credit and debit cards, and many websites crashed due to a massive increase in user activity.

The service providers plan to strengthen monitoring in case too many users access the site at once.

“Only up to 20 percent of the total requests will be processed on each of the five workdays, so delays will be limited,” an industry official said.