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GlobalData predicts that the credit card payment market in South Korea will exceed $770 billion in 2024

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GlobalData predicts that in 2024, the credit card payment market in South Korea will exceed $770 billion. Source: Shutterstock.com

According to GlobalData, EPI’s publisher, the South Korean credit card payment market will grow 6.3% in 2024 to reach KRW 1,017.1 trillion ($778.9 billion), supported by consumers’ strong preference for electronic payments.

GlobalData payment card analysis shows that the value of credit card payments in South Korea saw a 13.5% increase in 2022, driven by growth in consumer spending. However, in 2023, the value saw a slow increase of 6.9%, reaching KRW 956.7 trillion (USD 732.6 billion) due to the economic slowdown.

Ravi Sharma, Principal Analyst for Banking and Payments at GlobalData, comments: “South Korea’s credit card market is well developed, supported by a strong banking population, high consumer awareness, banks encouraging customers with a range of benefits, and government support to expand cashless transactions payment methods to increase the popularity of payment cards in the country. Thanks to the necessary payment infrastructure, including a well-developed point-of-sale (POS) infrastructure, consumers are gradually becoming more aware of the benefits of credit cards.

Credit cards dominate the payment card market in South Korea, accounting for an estimated 79.9% of the value of card payment transactions in 2024. This is due to banks’ flexible repayment options and value-added benefits such as cashback, rebates, installment options and rewards programs , coupled with the government offering tax breaks on credit card spending. Credit card holders receive tax benefits if they spend the equivalent of 25% of their annual salary on credit cards.

The annual frequency of credit card use increased from 125.6 times per card in 2020 to 145.4 times in 2024. This trend is expected to continue in 2024-28.

Thanks to a well-developed point of sale (POS) infrastructure, consumers are gradually becoming more aware of the advantages of payment cards. The number of POS terminals per million inhabitants in South Korea will be 65,355 in 2024, one of the highest in the Asia-Pacific (APAC) region.

The increase in e-commerce payments has also contributed to the development of the payment card market, as credit cards are the most frequently chosen payment tool for online purchases. Credit cards alone accounted for almost half (48.5%) of South Korea’s total e-commerce transaction value in 2023, according to the GlobalData 2023 Financial Services Consumer Survey.

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Sharma concluded: “Although South Korea’s credit card payment market is on a growth path, it still faces challenges such as uncertain economic conditions and rising inflation. Overall, the value of credit card payments is expected to register a slow compound annual growth rate (CAGR) of 5.7% from 2024 to 2028.