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Retailer Payments, Banking, Insurance and Assistance in South Korea investigates the market for financial services organised by 88 major retail brands in South Korea. As well as examining their initiatives in payment cards, banking products, insurance and assistance, the study also examines their involvement in proprietary and coalition loyalty programs, and details the online payment mechanisms accepted by those with an online sales capability. Among other data points, the report and PartnerBASE™ dataset that accompanies it embrace the following information about the retailers covered:

- whether they offer their own credit, debit or prepaid cards and, if so, the card issuers that they work with in this context if they do not issue the cards themselves;

- whether they are linked to one or more loyalty programs and, if so, whether these are proprietary or coalition schemes;

- whether they make non-card point-of-sale finance available to their customers and, if so, the finance providers that they employ for this purpose;

- whether they promote mainstream banking products such as general-purpose personal loans, mortgages and savings accounts and, if so, the partners that they co-operate with;

- whether they distribute accident, motor, dental, health, household, life, pet or travel insurance, or any kind of assistance services and, if so, the insurance or assistance providers used;

- for retail brands with an online sales capability, the payment means and providers that they accept for online purchases with consideration of payment cards, online accounts, mobile payments, bank transfers and other online payment options.

The report and PartnerBASE™ dataset can be used in the following ways:

- to gain access to a comprehensive source of information that provides detailed insights into the involvement of major retail brands in South Korea in payments, banking, insurance and assistance;

- to monitor the activity of key competitors in retailer financial services including Dongbu Insurance, Hyundai Card, KB Kookmin Card, Shinhan Card and Woori Card;

- to understand the potential in South Korea for converting proprietary retailer loyalty cards and coalition loyalty schemes into fully-fledged payment cards;

- to evaluate the extent to which consolidation among conventional banks is opening up opportunities for new retailer banks to emerge as ‘consumer champions';

- to appreciate the range of online payment choices open to consumers in South Korea who buy products and services through the websites of major retail groups.

Table Of Contents

Retailer Payments, Banking, Insurance and Assistance in South Korea
0.0 EXECUTIVE SUMMARY 1
1.0 INTRODUCTION 3
What is this report about? 3
Rationale 3
In many countries, consumers are tending to gravitate to larger retailers and to buy more online... 3
... which throws up new opportunities in payments, banking, insurance and assistance 3
Methodology 4
Survey of retailers 4
The survey's scope covers 88 important retail brands grouped across ten categories... 4
Definitions 5
Payment, banking, insurance and assistance products and services 5
Operating models 7
Weighted shares 7
PartnerBASE 7
Finaccord 8
2.0 MARKET ANALYSIS 9
Introduction 9
Retailer payment cards 9
Credit, debit and prepaid cards 9
Over a half of major retail brands in South Korea have their own co-branded or private-label credit card... 9
... albeit debit cards are increasing in popularity, in part as the result of government policy 11
Many retailers utilise more than one external card issuer for their payment card program... 11
... while a few work through captive or joint venture card issuers 12
By weighted share of partnerships with retailer brands, Woori Card is ranked first among card issuers 12
Woori Card was spun off from Woori Financial Group at the beginning of 2013 14
Hana Financial Group's acquisition of KEB makes it the country's second-largest financial group 14
Local banks and foreign-owned banks vie with national competitors for market share 14
A number of issuers of retailer payment cards have been created in the relatively recent past 15
Excluding private-label cards, retailer payment cards are linked to as many as nine different networks .. 15
BC Card is a national credit card company with international ambitions 17
Payment card schemes are most prevalent among fuel retailers and books and media chains 17
Gift cards 19
Closed-loop prepaid cards do not enjoy especially high penetration among major retail brands 19
Retailer loyalty programs 21
Most major retail brands surveyed in South Korea participate in some form of loyalty program 21
... with activity rates highest among online-only retailers 21
Proprietary loyalty programs 23
More than two thirds of major retail chains in South Korea operate their own proprietary loyalty scheme 23
Coalition loyalty programs 23
Nine coalition loyalty programs are adhered to by major retail brands in South Korea… 23
…with five supporting a co-branded payment card 23
South Korea's three main mobile network operators all operate coalition loyalty schemes... 23
... while others hail from a variety of different sources 23
Consumer finance 24
Banking products 25
Personal loans, mortgages and savings accounts 25
Homeplus co-operates with KISB for general-purpose personal loans 25
International payments / remittances 25
Insurance and assistance 25
Five major retail brands in South Korea promote mainstream insurance products of the type researched... 25
... with a variety of different providers used in this context 25
A rapidly ageing population makes ‘silver' health insurance policies especially marketable 26
Insurance partners used by retailers include both major players and smaller competitors 28
In a fragmented market, Dongbu Insurance claims the highest share of partnerships with retail brands 29
Retailer insurance schemes are concentrated in the department store and variety category 31
Online payments 32
Acceptance rates 32
All but one major retail brands selling online accept payment cards 32
Payment cards 32
Eight networks plus private-label cards enjoy online acceptance among major retailers in South Korea 32
Online accounts 34
MoCa Wallet is the country's only online account and its penetration is comparatively limited 34
Mobile payments 35
Six providers of mobile payments are used to one degree or another by online retail brands... 35
Bank transfers 36
Nearly all major online retailers in South Korea accept direct bank transfers as an online payment means .. 36
Other methods of online payment 36
Some retail brands selling online also accept other payment mechanisms 36
3.0 APPENDIX 38
Major captives and joint ventures 38


List of Graphics / Tables


0.0 EXECUTIVE SUMMARY 1
Provision rates for key payment, banking, insurance and assistance products, adherence rates for loyalty
schemes and online payment product acceptance rates among retailers in South Korea, 2014 2
1.0 INTRODUCTION 3
Retailers researched in South Korea, segmented by category, 2014 4
Retailers researched in South Korea segmented by distribution model, 2014 5
2.0 MARKET ANALYSIS 9
Provision of retailer card by type of card in South Korea, 2014 10
Retailer payment cards in South Korea: provision rate and operating models, 2014 10
Retailer payment cards in South Korea: unweighted and weighted issuer share of partnerships, 2014 .... 13
Retailer payment cards in South Korea: unweighted and weighted network share of partnerships, 2014 16
Provision of retailer payment cards by retailer category and distribution model in South Korea, 2014 18
Provision of retailer gift cards by retailer category and distribution model in South Korea, 2014 20
Retailer loyalty programs in South Korea: provision rates, program types and links to payment and other
cards, 2014 21
Provision of or involvement in loyalty programs by retailer category and distribution model in South Korea,
2014 22
Coalition loyalty programs in the South Korea: unweighted share of retailer brand members, 2014 24
Retailer insurance and assistance in South Korea: provision by type of insurance, 2014 27
Retailer insurance and assistance in South Korea: provision and operating models, 2014 27
Retailer insurance and assistance in the South Korea: unweighted and weighted provider share of
partnerships, 2014 30
Provision of insurance and assistance by retailer category and distribution model in South Korea, 2014 . 31
Retailer online payment acceptance in South Korea: acceptance rates by payment type, 2014 32
Payment cards accepted as an online payment mechanism by retailers in South Korea: unweighted and
weighted network share of acceptance, 2014 33
Online accounts accepted as an online payment mechanism by retailers in South Korea: unweighted and
weighted provider share of acceptance, 2014 34
Acceptance of online accounts as an online payment mechanism by retailer category in South Korea,
2014 35
Mobile payment services accepted as an online payment mechanism by retailers in South Korea:
unweighted and weighted provider share of acceptance, 2014 36
Acceptance of mobile payments as an online payment mechanism by retailer category in South Korea,
2014 37
Acceptance of other types of online payment mechanisms by retailer category in South Korea, 2014 ..... 37
3.0 APPENDIX 38
Retailer captives and joint ventures in payments, banking, insurance and assistance in South Korea:
operating models, partners and ownership, 2014 38

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