By Kim Jae-won
Shinhan Card’s supremacy in the credit card market is looking increasing vulnerable due to aggressive marketing from rivals, resulting in an erosion of customers and payments.
Industry data Tuesday showed that Shinhan’s market share in retail credit revenue was 22.4 percent in the three months through March, down 1.4 percentage points from the preceding quarter.
Shinhan’s declining presence is coupled with the strengthened position of its rivals. KB Kookmin Card, which spun off from KB Kookmin Bank earlier last year, now controls 14.6 percent of the market, up a full 1 point from a year ago, a significant change considering how rigid the credit card hierarchy had previously been.
Samsung Card’s market share reached 14.5 percent in the first quarter, up 1.6 points from the start of 2011. The company has been aggressively marketing since Choi Chi-hun took over as CEO in late 2010.
Shinhan posted 186.5 billion won in net profit in the first quarter, an annual decline of more than 25 percent.
A failure to retain its monopoly on credit cards issued for families eligible for government childcare subsidiaries was definitely a factor. Shinhan didn’t have its license renewed, while the cards are now issued by KB Kookmin, Woori Bank and Hana SK Card.
``Shinhan has been the player to beat. But it’s looking a lot more beatable now,’’ said a KB Kookmin official.
Shinhan had maintained its top dog status since acquiring troubled LG Card in 2007 amid a credit card crisis. Thanks to the purchase, the company could enjoy an influential presence in the industry.
Meanwhile, the industry is under scrutiny as financial regulators vow to strengthen their control of the sector as the nation’s household debt has become a national headache.
Credit card issuers are also under fire over their expensive handling fees. The Financial Services Commission (FSC) seeks to lower these fees as retailers have claimed that the credit card companies exploit them with their high commission rates. The FSC plans to announce the revised ratios in the near future and it may severely affect the industry.