Korean credit card companies saw their third-quarter earnings plunge due mainly to a cut in their fee rates on member stores, data showed on Nov. 15.
The combined net income of eight stand-alone card firms stood at 419.6 billion won (US$375 million) in the July-September period, down 20 percent from a year earlier, according to the data by the Financial Supervisory Service.
The nosedive was attributed to the fee-rate cut conducted in August. The card issuers lowered their rates by between 0.5 percentage point and 0.7 percentage point to ease the financial burden of member merchants.
Market sources estimated the fee reduction would shave the industry‘s earnings by around 350 billion won over a one-year period.
Lotte Card made a net loss of 26.7 billion won, while the bottom line of industry leader Shinhan Card shrank 15.7 percent on-year to 149.5 billion won.
KEB Hana Card was the only card issuer that enjoyed an on-year earnings gain, with net climbing 8.2 percent to 22.4 billion won.
By Alex Lee and newswires (email@example.com