Shinhan Card to develop credit card products for foreigners

2024.03.28 09:42:13

[Courtesy of Shinhan Card Co.]이미지 확대

[Courtesy of Shinhan Card Co.]

South Korea’s Shinhan Card Co. plans to develop credit card products for overseas tourists visiting Korea and foreigners living in the country.

According to sources from the financial industry on Wednesday, Shinhan Card and Shinhan Bank Co. will begin discussions in March 2024 to develop card products exclusively for foreigners.

It is known that the upcoming products will include a foreigner version of Shinhan Card’s successful SOL Travel Check Card that will offer foreign tourists visiting Korea the same overseas travel-focused benefits included in the card for Koreans, such as preferential currency exchange fees as well as exemptions from overseas payment and automated teller machine (ATM) fees.

“We have confirmed the success of our travel-related products targeting Korean travelers going abroad and now plan to develop products for foreigners coming to Korea,” a Shinhan Card official said.

Shinhan Card’s move is also influenced by the increasing spending power of overseas tourists, with the amount of credit card payments made by foreign tourists in the country increasing every year, even though the number of visitors is lower than before the Covid-19 pandemic.

According to Korean tourism statistics, credit card spending by foreign tourists in Korea dropped sharply to around 1 trillion won ($741.65 million) during the pandemic from 5.49 trillion won in 2019 but rebounded to 6.91 trillion won in 2023.

Although the number of foreign tourists was higher in 2019 at 17.5 million than in 2023 at 11.03 million, the total amount paid by foreign tourists increased in 2023 due to higher spending per capita.

The number of visitors is also recovering rapidly, with 245 percent more visitors in 2023 than in 2022, leading to expectations that foreign tourists‘ spending in the country will increase further moving forward.

Shinhan Card also plans to consider developing credit card products exclusively for foreigners residing in Korea. Although it was challenging to develop products for foreigners in the past due to the difficulties in evaluating their credit, Shinhan’s in-house ‘High Credit’ venture team develop a credit evaluation model for foreign residents in Korean in February 2024. The model, the first to be developed among Korean financial institutions, combines financial transaction histories with non-financial information via big data.

As the number of foreigners living in Korea rises rapidly, developing credit card products for foreigners could become a niche market in the card business, which is declining in competitiveness. According to the Ministry of Justice, the number of foreign residents in Korea was 2.36 million in February 2024, up 9.1 percent from a year ago.

By Park Na-eun and Yoon Yeon-hae

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