Hyundai Card has decided to extend its exclusive partnership card (PLCC) contract with SOCAR, which was set to expire next year. As Hyundai Card's PLCC strategy wobbles with major partners such as Starbucks recently departing, the company has bought some breathing room by keeping existing partner SOCAR.
According to the card industry on Oct. 20, SOCAR is said to have reached a preliminary agreement to extend its PLCC contract with Hyundai Card early next year. A SOCAR official said, "We have no plans to terminate the PLCC contract with Hyundai Card at this time."
A PLCC is a product jointly launched by a card company and a partner brand. Rather than offering general-purpose benefits, it concentrates benefits at the partner brand. Unlike a simple co-branded card, the collaborating companies also share expense burdens, revenue distribution, and data usage. Hyundai Card launched a PLCC with SOCAR in Jan. 2021. With this product, customers using SOCAR services can receive benefits such as a 3% accrual on the payment amount.
Hyundai Card has made PLCC a priority business and has internally stuck to a strategy of "exclusive contracts with leading companies." Since first introducing PLCCs in Korea in 2015, Hyundai Card has formed exclusive partnerships with industry No. 1 corporations such as Korean Air, Starbucks, and Baemin. In June, Hyundai Card also named Cho Chang-hyeon, head of card sales well-versed in PLCCs, as the new CEO to succeed Kim Deok-hwan, who offered to resign.
In the first half of this year, Hyundai Card posted 86.6506 trillion won in credit sales, ranking No. 1 in the industry. This is seen as the result of rapidly attracting customers based on its PLCC strategy.
However, in recent industry assessments, Hyundai Card's PLCC strategy is said to be faltering. This month, Starbucks signed a PLCC contract with Samsung Card, departing from Hyundai Card's roster of partners. Baemin also introduced a co-branded card with Shinhan Card, moving away from an exclusive partnership structure with Hyundai Card.
An industry official said, "By preserving its partnership with SOCAR, the No. 1 company in domestic car-sharing market share, Hyundai Card has been able to maintain part of its PLCC business foundation."