South Korea’s money transfer app Toss is in talks with Hana Card to launch a new-concept private label credit card (PLCC).
Sources said on Wednesday the store-branded credit card tentatively named ‘Toss Credit Card’ will be launched within this year in cooperation with Hana Card.
The partnership comes after Toss’s operator Viva Republica has teamed up with KEB Hana Bank to win the third license to operate internet bank.
The new credit card to be built on big data and analytics from the fintech firm that has drawn 10 million downloads is intended for use at specific stores.
The PLCC is very different from previous Toss-branded credit or check cards with specially designed bonus rewards or cashback issued in partnership with other credit card companies such as BC Card, Samsung Card and KB Card.
It focuses on customer benefits when used at specific businesses such as gas stations and shopping malls. Under this system, the credit card firm and the partner merchant will jointly share merchandise costs and future profits.
They can launch a joint marketing program based on their complementary customer data. For Toss, it would be able to tap into the credit card market without additional costs. Hana Card can expect new customer leads from its partnership in the market where credit card companies face fierce competition.
Hana Card, the smallest player in the local market, posted 49.8 billion won ($42.9 million) in net profit in the third quarter, down nearly 40 percent from a year ago, due to thinner merchant fees.
The PLCC business may signal a bigger role of fintech companies in the local retail industry where online payment services are still new. The offering of diversified and customized services to PLCC users is expected to increase customer loyalty to fintech services following industry trends in advanced markets, experts say.
In August, Apple launched its first credit card based on Apple Pay in partnership with Goldman Sachs and Mastercard in the U.S. Apple Card users will get an up to 3 percent cashback on the total amount they spend on the iPhone. Apple Card offers an easy-to-understand view of spending and requires no fees, encouraging customers to pay less interest.
By Chung Joo-won, Lee Sae-ha and Minu Kim
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