Heads of card companies, gathering mouths “New Year, the first year of the payment market war”
Big tech independent from card companies, real’enemy’…
[화이트페이퍼=장하은기자] New Year (辛丑年) New Year is expected to be the first year of the war between credit card companies and Big Tech over the payment settlement market. As new businesses such as My Data (personal credit information management), My Payment (payment order), and comprehensive payment and settlement businesses, which are considered to be the biggest future food, are in full swing this year, the card industry is struggling. The card industry plans to take the lead in the market by expanding the base from finance to living in the face of big tech that penetrates the financial sector from life based on the platform. It is predicted that the competition between card companies and big tech to preoccupy the payment market will become more intense unlike previous years.
■ Heads of card companies, gathering mouths “New Year, the first year of the payment market war”
Card company presidents agreed that in order to maintain a dominant advantage in the rapidly changing financial market through this year’s New Year’s speech, it is necessary to implement a life finance platform that goes beyond the meaning of existing card companies.
According to the card industry on the 6th, most card company presidents, including Shinhan and KB Kookmin Card, all emphasized the’financial platform’ with one voice.
In his New Year’s address, Young-jin Lim, president of Shinhan Card, said, “In the rapidly changing new payment market such as NFC, OR, biometric authentication, beyond plastic cards, customer payments are made through collaboration with various players and introduction of differentiated technologies. We have to reinvent the experience.” In addition, he added, “It is necessary to systematically prepare and promote new businesses based on digital and big data such as My Data created by revitalizing the data economy and credit rating (CB) for individual business owners.” Along with expanding our performance, we should actively discover and nurture new business models based on our strengths such as members and data.”
Lee Dong-cheol, president of KB Kookmin Card, emphasized that it will be a desperate time for new competitors, such as Big Tech, to enter the market this year. President Lee said, “As the word “banking is necessary but not banking” becomes a reality, card companies may no longer exist in the future. “The situation we are facing is still not easy, but the rules of the game will change. “The time is the best time to close the gap.” In addition, “2021 will be an important year that will be the cornerstone,” he added. “Kookmin Card should play a leading role in building KB Financial Group’s’No.1 Financial Platform’ along with strengthening the competitiveness of its business.”
Hana Card President Jang Kyung-hoon also said, “Digital platforms will emerge as a core competitive factor for companies this year.” “With the full-scale economic activities of the millennial generation, the corporate value of big tech such as Naver surpasses financial companies. Also, he emphasized that these inflection points should be taken as opportunities.” In the meantime, President Jang made three strategies for this year’s main strategy to convert to a digital payment company: ▲Establishing a digital platform ecosystem and securing competitiveness ▲Business diversification through new businesses, and restructuring a portfolio suitable for digital payments ▲Forming a consensus with a general digital payment company Presented.
Woori Card’s new president Kim Jung-ki held an inauguration ceremony earlier this month and said, “2021 will be the first year to leap forward as a’digital payment and settlement financial company.'” President Kim said about the prospect of the card industry this year, “the possibility of a real economic downturn due to Corona 19” He said, “It will not be easy to do internal and external environments such as slowing profitability in the payment and settlement business, which is a major business, fierce competition with big tech platform companies in various areas such as data business and simple payment, and adaptation to the rapidly changing digital environment.” I ask you to respond positively,” he said.
■ Big tech independent from card companies, real’enemy’…
All the heads of card companies thought that 2021 will be the first year when the boundaries of the financial sector are blurred beyond comparison with previous years. There was also a sense of crisis that a big tech company with a strong platform could gain dominance in the payment market. The card industry is planning to focus on realizing a life finance platform above all in order to preserve the market advantage.
The card industry’s sense of crisis seems to be in line with the expansion of Big Tech’s entry into the payment market. As Big Tech, a giant information technology company based on Internet platforms such as Naver and Kakao, expands into the payment market, the card industry’s position will inevitably decrease.
Competition between credit card companies and big tech companies over the payment market has continued in recent years. Nevertheless, the reason that the card industry is particularly tense this year is that the influence that card companies have extended to big tech is predicted to decrease. In the meantime, more than 90% of simple payment companies such as Naver Pay, Kakao Pay, and Payco had to link with credit cards, and credit card companies were able to obtain additional profits, so there was no significant threat to the expansion of the simple payment market. However, this year’s revision of the Enforcement Decree of the Specialized Credit Finance Business Act made it possible for big-tech companies to make deferred payments, providing a condition for independence from big-tech card companies.
If card companies and Big Tech on the same line compete in new businesses such as My Data (personal credit information management business), My Payment (payment order business), and comprehensive payment and settlement business, Big Tech, which has already secured platform competitiveness, is a threat unlike before. It is the opinion of the card industry that there is a high probability of becoming an enemy. Already, simple payment companies are starting to draw a line with credit cards, accumulating two to three times more points when customers deposit cash and pay with points compared to paying through credit cards.
An official from the credit industry said, “Up until last year, even if simple payments grew, I didn’t even have a sense of crisis because I thought that it had to be linked with a credit card anyway in order for payment to be made. I predicted.
Card companies pointed out that implementing a’life finance platform’ is the top priority in order not to be pushed back in the competition to preoccupy the market with Big Tech. The life finance platform refers to a service that enables consumers to solve their daily needs from life to finance in one platform. Card companies need finance above all else, so they plan to put all their efforts into implementing a platform that can naturally connect to the living area after access. It is a diagnosis that, while strong platform companies such as Kakao naturally move to the financial field from their lives such as chatting, news, and shopping, it is difficult to expect such a natural flow through the current card company app.
A card company official said, “The company’s app also provides living areas such as payment, monthly rent, and healthcare, but the effect is insignificant.” I will spur it.”
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