The number of corporate card members and the transaction volume from card companies have decreased. This is interpreted as corporations reducing expenditure as uncertainty in the domestic and foreign economy gradually rises.
According to the Korea Credit Finance Association on July 1, the number of corporate card (credit card) members from nine domestic card companies (Shinhan, KB Kookmin, Lotte, BC, Samsung, Woori, Hana, Hyundai, NH Nonghyup Card) as of May was 3,062,000, a decrease of 6.9% compared to the same period last year (3,290,000). The total approval amount for corporate cards in the first quarter of this year was 370 million, a drop of 2.2% from the same period last year.
As the business environment for corporations has become more difficult, the budget for corporate cards is also believed to be decreasing. According to the June corporate business survey results released by the Bank of Korea on June 26, the Corporate Business Sentiment Index (CBSI) for all industries in June was recorded at 90.2, down 0.5 points from the previous month. When this index is above the long-term average of 100 (2003-2024), it indicates an optimistic business sentiment overall; conversely, if it falls below, it suggests a pessimistic outlook. It appears that the rising tariff rates and the geopolitical risks due to the Middle East war have worsened corporate consumption sentiment.
On the other hand, the total amount approved for corporate cards in the first quarter of this year was 53.2 trillion won, an increase of 8.8% compared to the same period last year. An industry official noted that the transaction amount has also risen in accordance with inflation rates. According to Statistics Korea, the consumer price inflation rate this year has maintained an increase of around 2% monthly.
However, the profits from the inflation increase are offset by low commission rates, meaning there has been little change in profitability, according to the card industry. The Financial Services Commission decided in February to lower card commissions for merchants with annual sales of less than 300 million won from the existing 0.5% to 0.4%. It is analyzed by the Financial Services Commission that applying preferential commission rates will relieve small and medium merchants of card commission burdens amounting to approximately 300 billion won annually.
Ultimately, from the perspective of card companies, the increase in the number of corporate card members and transaction volumes is essential for generating revenue. A card industry official said, "As the delinquency rate of card loans increases and the overall situation of card companies worsens, corporations are reducing even the use of corporate cards, leading to increased difficulties." He explained, "Corporate cards have a large transaction scale per case, which significantly impacts profitability."