[Photo provided by eBay Korea]
Smile Card, a credit card that can solely be used for online purchases, launched jointly eBay Korea and Hyundai Card last year, has been creating a splash in Korea where online shopping and transactions have become commonplace.
The number of subscribers of Smile Card exceeded 420,000 in just a year since its launch in June 2018. The figure is expected to continue to rise to surpass the 500,000 mark within this month.
Smile Card is a private label credit card (PLCC) that is branded for specific stores affiliated with eBay Korea including its online shopping malls Gmarket and Auction. Users can receive cashback service when they make payments via the card at the stores, 1 percent for regular payments and 2.3 percent for payments through eBay’s digital payment service Smile Pay.
A PLCC is a store-branded card where retailers come up with customer reward programs and a third party such as a bank or credit card company manages the card payment system. For Smile Card, Hyundai Card is responsible for collecting payments from cardholders.
The card boasts high utilization rate unlike general credit cards that have many dormant accounts. Last year, 83 percent of new credit card membership or 8.34 million accounts were cancelled due to inactivity. On the other hand, about 90 percent of new members of Smile Card use the card on the day of issue because it takes just a couple of minutes to sign up for the service including a credit check and users can make payments immediately through the card accounts created at their smartphones.
Hyundai Card said it can provide much more generous benefits to Smile Card subscribers because the issuer can save marketing cost significantly. The amount of transactions has also increased as it gets easier for users to make payments. Members of Gmarket and Auction who signed up for Smile Card made 63 percent more payment per month than before subscription.
By Lee Yoo-jin and Choi Mira
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]