KB Kookmin Card, the credit card unit of Kookmin Bank, said that it has reduced the minimum commissions on installment payments for billing by 1 percentage point, and those for cash advances by 0.5 percentage point from Sept. 28.
It means that the credit card firm has cut fees between 10 percent and 13.5 percent on installment payments, and the commissions on cash advances will stand between 8.5 percent and 26.95 percent.
Officials of the credit card firm said the company readjust the fees based on the cost of funds they borrow from other financial institutions twice a year, and this time around they cut fees reflecting reduced borrowing costs as the Bank of Korea cut the benchmark interest rates in June.
The credit card firm also introduced “KB Kookmin Alpha One Card” in September, a fintech product for the first time in the financial industry, as part of the company’s strategy to zero in on what exactly customers want. The company has been working on a plan from early this year to focus its operations centered on customer value by switching to “information business” to reset its management strategy.
Since its introduction only three weeks ago, the Alpha One Card has already been issued around 8,000 times. Its popularity stems mainly from the fact that the new credit card provides all the benefits associated with other cards on the market, meaning that customers would not have to use a number of cards to get all their respective benefits.
“The rate discount is clearly a minus factor on bank profits, but the increasing use of credit cards following tax benefits next year and the ameliorating economy may offset the loss,'' said Ryu Jae-chul, an analyst at TongYang Investment Bank.
Banks, whose net interest margin is falling, have focused on the credit card business as a new growth engine. According to the Korea Investment and Securities, banks made 47.8 percent of their commission income from credit card businesses. Commissions from fund sales, meanwhile, took up only 10 percent of the total commission income.
With strict regulations on the housing mortgages businesses, banks have strengthened credit card marketing efforts this year.
KB Kookmin Card has launched a new credit card called "K-World" in partnership with JCB International.
The card has lowered the fees it charges when card members use their cards overseas by 50 percent to 0.5 percent.
Currently Visa and MasterCard users must pay 1 percent transaction fees for every purchase they make overseas. American Express Card members pay 1.4 percent in fees. The total overseas credit card transaction volume last year was US$10.56 billion and Korean credit card users paid a total of 107.2 billion won in transaction fees to international card issuers.
The K-World Card can allow the user to make transactions at 26 million participating merchants and take cash advance in ATMs across 190 countries. The 0.5-percent transaction fee will be applicable until the end of 2019 for purchases only. KB Kookmin Card will print the K-World logo on cards to be issued from mid-July and steadily expand the number of participating merchants overseas.
In celebration of the K-World Card's launch, the card issuer will hold a promotional event in which it will give away an Okinawa package tour gift certificate and 20 prepaid cards worth 50,000 won from card users who made purchases over 100,000 won with the card. For those users who made overseas purchases over and above 100,000 won, it will also give 2 percent of the amount in reward points.
_국민카드 윤웅원.jpg)
_국민 알파원카드.jpg)
