[Photo by Yonhap]
South Korea’s credit card spending fell for the first time in 16 years last year due to the coronavirus pandemic that kept people at home, spending less time outside or traveling.
According to the Bank of Korea data on Tuesday, credit card spending by individuals and businesses amounted to 1.96 trillion won ($1.7 billion) in 2020, down 0.3 percent from a year earlier. It is the first time for the country to record an annual decline in credit card spending after a 26.8 percent fall in 2004.
Credit card spending on online purchases rose by 24.2 percent, on automobiles by 20.6 percent, and on furniture and home appliance by 6.3 percent compared to a year ago. But credit card spending on traveling and tourism plunged by 66.0 percent, on education by 17.1 percent and on dining out by 14.3 percent.
In contrast, prepaid card spending jumped by 590.8 percent on year to 17.0 billion won, largely driven by the government’s prepaid card-based stimulus funding for Covid-19.
Debit card spending also grew 1.5 percent on year to 540 billion won, but the growth slowed compared to a 6.2 percent rise recorded a year earlier before the pandemic crisis.
Contactless payment through smartphones or other electronic devices amounted to 849.0 billion won, up 16.9 percent from a year ago. Face-to-face payment for purchases at offline stores, meanwhile, declined 5.6 percent to 1.4 trillion won.
Contactless payment accounted for 39.6 percent of total purchases made in the fourth quarter last year, continuing growth following a 32.2 percent rise in the first quarter of 2019 and 36.4 percent in the first quarter of 2020.
Payment with smartphones jumped 16.4 percent on year, while plastic card payment shrank 7.4 percent last year.
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]