Strengthened Untact Consumption Needs Due to COVID-19 Met Early
Untact Payment Share at 65% Including Online Shopping, Delivery, and Subscriptions
[Asia Economy Reporter Lim Hye-seon] Online distribution company eBay Korea's 'Smile Card,' launched in collaboration with Hyundai Card, is rapidly growing as the untact (contactless) trend gains momentum.
According to eBay Korea on the 6th, the 'Smile Card,' the first private label credit card (PLCC) introduced in the open market, has surpassed 900,000 subscribers. A PLCC is issued jointly by a retailer and a card company, offering benefits specialized for the respective retailer compared to general credit cards or affiliate cards. Without any performance or accumulation limits, users earn up to 2% of their spending as Smile Cash whenever they use the card at all online and offline affiliated stores.
As of May, 99% of customers who paid with the Smile Card on eBay Korea's open markets?Gmarket, Auction, and G9?used Smile Pay for the transaction. Compared to January this year, before the full spread of COVID-19 in Korea, the proportion of Smile Pay usage when paying with the Smile Card at offline and online merchants outside the eBay Korea sites increased by about 7% in May, showing a strengthening untact consumption trend.
The share of untact payments was also high. From January to May this year, about 65% of Smile Card transaction amounts were spent on untact consumption such as online shopping, delivery services (Baedal Minjok, Yogiyo, Market Kurly, etc.), and subscriptions (Netflix, YouTube Premium, Melon, etc.). This figure is approximately 2.5 to 3.7 times higher than that of Hyundai Card's other representative credit cards. Since February, when COVID-19 became widespread, the untact transaction amount of the Smile Card increased by about 13% compared to the previous month. In April, it rose by more than 20% compared to January. Not only transaction amounts but also the number of users and usage rates have increased in untact consumption, with over 90% of Smile Card members engaging in untact consumption at least once a month, indicating it has become common.
Looking at the proportion of Smile Card members by age group, as of May, those in their 30s and 40s accounted for about 75%, the highest share. The proportion of members in their 20s and 30s increased by about 5% in May this year compared to the same period last year. Conversely, the share of members in their 40s and 50s slightly decreased during the same period. Na Young-ho, Head of Strategic Business at eBay Korea, said, "The Smile Card is designed specifically for mobile untact consumption, and we expect to easily surpass 1 million members within the year," adding, "We are continuously discussing new service models with Hyundai Card."
Meanwhile, to celebrate the 2nd anniversary of the Smile Card, eBay Korea is holding an event offering benefits worth up to 180,000 KRW, including additional points, billing discounts, and instant discounts. If you register your Smile Card with Smile Pay and make your first payment by the 14th, you will receive 10% (up to 50,000 KRW) of the amount paid with the Smile Card as Smile Cash during July. On July 7th only, a 5% billing discount (up to 30,000 KRW) will be provided for payments of 150,000 KRW or more made with the Smile Card. Until the 12th, a 14% discount (up to 100,000 KRW) is available when paying with the Smile Card for all products on YogiYeoDdae and exclusive Hotel Week products.
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