Credit card issuers capitalize on travel boom
The credit card arms of financial groups are seizing the opportunity presented by the overseas travel boom to attract more customers, whose spending outside the country has been increasing for the fourth consecutive year up to 2023.
According to Korea Tourism Organization, a total of 22.3 million Koreans traveled abroad. The figure is 79 percent of the entire number of outbound travelers in 2019 before the pandemic.
Meanwhile, Bank of Korea data showed those outbound travelers’ spending using credit or debit cards increased 32.2 percent year-on-year to $19.22 billion in 2023.
The 2023 figure marked an increase for the fourth straight year from 2020, when the pandemic was at its height.
Under the circumstances, Hana Card is bolstering the campaign on Travlog Card after it was introduced as a check card, which is similar to a debit card, in July 2022.
Its users are exempt from currency exchange commissions when withdrawing cash or making payments in 26 countries.
The number of Travlog Card users surpassed 4 million at the end of 2023, with the amount of spending topping 1 trillion won ($743.8 million).
By the end of January, 39.2 percent of international transactions using check cards issued in Korea were made with Travlog Card, up from 20.2 percent in July 2022.
As these cards come in the form of debit cards, they can’t expect much commission as they do with credit cards. However, card companies are competing to attract customers.
“Giving up commission may be a loss for the company in the short term, but not in the long term as it can secure more customers,” a credit card industry source said.
The source said Hana Card’s sales campaign can help expand customers for other affiliates of Hana Financial Group by sharing customer data under their consent.
To outcompete Hana Card, Shinhan Card introduced SOL Travel Check Card in February. The card offers commission-free foreign exchange transactions in 30 countries.
The cardholders are also free to use members-only lounges at airports across the world twice a year.
The number of cards issued surpassed 300,000 a month after it was released, which is relatively fast compared to the growth of other check cards.
Woori Card partnered with Travel Wallet, a digital wallet platform operator, to issue Travel Wallet Woori Card in August 2023.
The card is noted for offering the lowest commission rate in the market at 1 percent when travelers return home and exchange foreign currencies back to the Korean currency.
Both affiliates of KB Financial Group, KB Kookmin Card and KB Kookmin Bank, jointly plan to issue KB Kookmin Travelers Check Card next month to keep up with the overseas travel boom.