The increase in profit largely came from commission charges paid by franchisees. In the first half the net profit from charging franchisees increased 195.3 billion won compared to a year ago, largely thanks to the rise in debit and credit card spending. Card spending in the first half of this year increased 15.7 trillion won, or 4 percent, compared to a year ago to total 405.6 trillion won. Credit card spending grew 3.9 percent year-on-year to 323.3 trillion won while debit card spending was up 4.7 percent to 82.3 trillion won. Card companies also saw an increase in installment payments, adding 67.2 billion won compared to the previous year.

Credit card issuers’ profit from loans has also increased sharply, up 174.9 billion won compared to the same period a year ago. In the first half of this year, cash withdrawals through credit cards and loans that were borrowed increased by 4.2 trillion won, or 8.6 percent compared to a year ago, to total 52.9 trillion won. Cash withdrawals grew 3.4 percent to 30.2 trillion won while credit card loans surged 16.4 percent to 22.7 trillion won. This was largely considered to be the result of the government tightening loan regulations at banks in order to cool the economy. While loans via credit cards grew, this did not affect overdue payments, which saw a slight improvement compared to a year ago. 

Overdue payments on credit card loans dipped from June 2017’s 2.34 percent to 2.33 percent. The number of cards issued also grew in the first half. In the first six months of this year, 122.6 million credit cards were issued, up 4.9 percent on year, while 1.11 million debit cards were issued, up 1.2 percent. The FSS, however, has raised concerns over the heated competition among credit card companies that have been increasing their marketing expenses. “Marketing expenses have been growing every year,” said a FSS official. “But the competition between card companies is worsening profitability.” Among the credit card issuers, BC was the only one that saw its net profit shrink as it dropped 24 percent year-on-year to 75 billion won. Shinhan remained top with a net profit of 312.5 billion won, up 62 percent.