Payment cards preferred method in South Korea

New figures from GlobalData have revealed the prevalence of payment card usage in South Korea, accounting for 60.9 per cent of payments made for online purchases in 2022, according to the 2022 Financial Services Consumer Survey.

The poll of over 50,000 people aged over 18 across 40 countries found that over 80 per cent of Korean consumers had made online purchases in the last six months, compared to only 10 per cent saying they had never shopped online.

Credit and charge cards also accounted for a 53.2 per cent share in South Korean e-commerce payment value in 2022, mainly due to their offering of benefits including interest-free instalment payment options, reward programs, cashback and discounts.

“South Korea’s e-commerce market is among the most developed in the world, supported by the country’s robust technology infrastructure, which ensures the availability of high-speed internet, rising smartphone penetration, high urbanisation, and growing number of tech-savvy customers,” Ravi Sharma, Lead Banking and Payments Analyst at GlobalData, said.

“Furthermore, the COVID-19 pandemic has accelerated the trend with rapid shift in consumer preference from brick-and-mortar to online channel.”

The survey results showed payment cards were closely followed by alternative payment tools, jumping over 12 per cent from 2020 to account for a 27.3 per cent payment value share in 2022. Digital wallet and mobile payment apps including Naver Pay, Samsung Pay, Kakao Pay and SmilePay were recorded as the most popular alternative methods among online shoppers.

“Alternative payments are increasingly being embraced by Korean consumers for online shopping, a trend that is prevalent in many Asian markets,” Sharma said.

“However, they still have a long way to go to challenge the dominance of payment cards.”