Payments Snapshot in South Korea: Coronavirus (COVID-19) Sector Impact

Payments Snapshot in South Korea: Coronavirus (COVID-19) Sector Impact

Summary

The Coronavirus (SARS-CoV-2) outbreak, dubbed COVID-19, is first and foremost a human tragedy, affecting millions of people globally. The contagious Coronavirus, which broke out at the close of 2019, has led to a medical emergency across the world, with the World Health Organization officially declaring the novel Coronavirus a pandemic on March 11, 2020. The virus has spread to 187 countries/regions with over 2.6 million confirmed cases, with its spread outpacing other major infectious outbreaks from the past.

On March 24, 2020, South Korea’s government approved a KRW100tn ($86.61bn) economic package to support the economy and contain job losses. The package includes KRW29.1tn ($25.20bn) in loans to SMEs and a further KRW20tn ($17.32bn) to buy corporate bonds and commercial papers of companies facing a credit crunch.

Furthermore, in an attempt to avoid contraction in the overall economy, the Bank of Korea reduced its benchmark rate on March 16 from 1.25% to 0.75% - a 50-basis-points cut. This move will encourage consumers to take new credit, thereby driving spending.

This report focuses on the impact of the Coronavirus outbreak on both the economyand the cards and payments industry in South Korea. Based on our proprietary datasets, the snapshotprovides a detailed comparison between pre-COVID-19 forecasts andrevised forecasts of total payment card, debit card, and credit and charge card transactions by value and volume. It also offers information on measures taken by the government to combat Coronavirus.

Scope

- The eight South Korean national air carriers are staring at a possible loss of KRW5.8tn ($5.02bn) by June 2020, with a growing number of international routes shutting down as several countries announce entry bans on individuals traveling from South Korea. The steep dip in consumer spending, particularly in sectors like travel and tourism and accommodation and coupled with entertainment, will impact the payment industry as well.
- Additionally, when shopping in-store, consumers will shift from cash payments to digital payments, particularly mobile wallets, in order to avoid exposure to disease vectors such as cash and POS terminals.
- While the epidemic will impact the overall payments industry, it is also likely to benefit fintech companies and retailers offering new payment technologies.

Reasons to Buy

- Make strategic decisions using top-level revised forecast data on the South Korean payment industry.
- Understand the key market trends, challenges, and opportunities in the South Korean cards and payments industry.
- Receive a comprehensive insight into payments market in South Korea.