Card Spending Abroad Decreased in Q1... Impact of Reduced Online Overseas Direct Purchases

Bank of Korea Reports 'Card Overseas Usage by Residents in Q1'
Overseas Travel Demand Continues with Increased Departures
But Online Shopping Overseas Direct Purchase Amount Decreases

[Image source=Yonhap News]

Resident overseas card spending, which hit an all-time high last year, slightly slowed in the first quarter. Although the number of overseas travelers increased, online overseas direct purchases decreased.

According to the "Overseas Card Usage Performance of Residents in the First Quarter" released by the Bank of Korea on the 29th, resident overseas card spending in the first quarter of this year approached $5.18 billion, a 0.1% decrease from the previous quarter ($5.19 billion). While demand for overseas travel continued and the number of departures increased, seasonal factors caused a decline in online shopping overseas direct purchases.

Last year, resident overseas card spending reached a record high of $19.222 billion. In the first quarter of last year, it was $4.601 billion, $4.646 billion in the second quarter, $4.79 billion in the third quarter, and $5.185 billion in the fourth quarter.

The number of domestic residents departing in the first quarter was 7.42 million, up from 6.52 million in the previous quarter. Online shopping overseas direct purchases amounted to $1.24 billion, slightly down from $1.49 billion in the previous quarter.

An Joo-eun, head of the Capital Movement Analysis Team at the Bank of Korea, explained, "There are more event-driven occasions such as Black Friday in the fourth quarter than in the first quarter," adding, "Online overseas direct purchases decreased due to seasonal factors."

On the other hand, the number of cards used overseas increased. The number of cards used overseas by residents in the first quarter was 17.488 million, a 1.5% increase from 17.233 million in the previous quarter. The number of cards used has steadily increased due to card companies' sales activities and new card launches.

With fee exemption benefits centered on check cards, check card spending increased while credit card spending decreased. Check card spending in the first quarter was $1.288 billion, up 5.6% from $1.219 billion in the previous quarter. Conversely, credit card spending was $3.893 billion, down 1.8% from $3.966 billion in the previous quarter.

However, the usage share by card type was overwhelmingly dominated by credit cards (75.1%), followed by check cards (24.9%), including debit and prepaid cards.

Card spending by foreigners in Korea was about half the level of resident overseas card spending. In the first quarter, non-residents' domestic card spending was $2.333 billion, less than half of residents' spending ($5.182 billion).