Credit card issuers capitalize on co-branded cards
Credit card issuers are increasingly capitalizing on partnerships on co-branded cards with top-tier brands from their respective industries in a bid to secure larger, more diverse pools of customers.
Co-branded cards, or private label credit cards (PLCC), are intended to offer benefits in buying goods and services from a specific commercial company that boasts strong customer loyalty.
Several PLCC partnerships are formed between KB Kookmin Card and e-commerce giant Coupang, between Hyundai Card and No. 1 beauty product store chain CJ Olive Young and between Shinhan Card and multi-international award-winning airline Singapore Airlines.
A PLCC has the corresponding partner company logo or design printed on it. It offers deferred payment,
other more attractive payment terms, generous loyalty points to gain discounts on future purchases and other benefits.
The benefits are a motivating factor in attracting customers to use
the card, resulting in customer retention and diversified revenue sources for credit card firms.
According to KB Koomin Card, Tuesday, more than 500,000 Coupang Wow Cards were issued after its debut in October 2023 under the company’s PLCC partnership with Coupang.
The card is named after Coupang’s membership service.
On a monthly average, a Coupang Wow cardholder shopped on the Coupang website 2.5 times more than a non-cardholder.
“The popularity of the Coupang Wow Card is anticipated to increase the number of cardholders to over 1 million within this year,” KB Kookmin Card said.
Hyundai Card signed its 19th PLCC deal with beauty retailer CJ Olive Young on May 7. The card company pioneered the PLCC market in 2015, signing partnerships with discount store chains, gas stations, fashion brands and more.
“As a loyal customer of CJ Olive Young, I am glad to work with the company,” Hyundai Card CEO and Vice Chairman Ted Chung said on social media.