‘Travel card’ market becomes red ocean as rivalry intensifies
NH Nonghyup Financial Group marks the last of the top five financial groups to enter the competitive market for specialized cards targeting Koreans traveling overseas. With the market already saturated, intense competition is anticipated among companies to differentiate their products.
NH Nonghyup Bank and Card announced the launch of Travely, a card specialized for overseas travel, Thursday.
“We get to present this card in summer vacation peak season,” an official from NH Nonghyup Card said. “As the latest entrant in the travel card market, we have put a lot of effort into differentiating our offerings.”
The travel card market has been particularly dynamic since January, when Toss Bank launched a foreign currency account tied to the Toss card, with zero commissions on money exchange. The internet-only bank drew over 1 million customers within four months.
Five major financial groups quickly followed suit. Hana Card, with its existing travel-specialized card Travlog, immediately announced zero 한국을 commission fees for money exchange. Shinhan, KB Kookmin and Woori Card also released cards offering similar benefits shortly after.
Such cards offer the advantage of attracting younger customers while helping to reduce costs associated with purchasing and storing foreign currencies, according to industry officials.
The surge in vacationing abroad has led to a significant increase in demand for foreign transactions, luring financial companies into the competitive arena.
According to the Credit Finance Association, last year’s overseas spending by individuals using credit cards from nine domestic card companies reached 16.85 trillion won ($12.1 billion), a 41 percent increase from the previous year.