Personal overseas debit and check card spending in Korea surpassed 6 trillion won on an annual basis for the first time, driven by the soaring popularity of "travel cards" that eliminate currency exchange fees.
According to financial industry data released Wednesday, personal overseas spending on debit and check cards reached 6.31 trillion won ($4.5 billion) in the first 11 months of this year, a 31.7% increase from 4.79 trillion won in the same period last year.
While the rising won-dollar exchange rate contributed to the increase, the growth remains steep even accounting for currency fluctuations. According to the Bank of Korea, the average won-dollar exchange rate was 1,363.98 won last year based on the market average rate. This year, the rate has been hovering around the mid-1,400 won level, yet overseas debit card usage has still surged.
The disparity becomes clearer when compared with overseas credit card usage. Personal overseas credit card spending totaled 13.50 trillion won in the first 11 months of this year, up only 2.6% from the previous year.
The surge in overseas debit card spending is attributed to travel cards. Travel cards are debit-based cards that can be loaded domestically and used for payments or withdrawals abroad. They have gained popularity due to their convenience and low exchange and transaction fees. Card issuers have further fueled demand by offering benefits such as cashback and airport lounge access, generating strong word-of-mouth among travelers.
"Recently, many customers look for travel cards with good benefits before traveling to destinations like Japan or Hong Kong," an industry official said.
Hana Bank and Hana Card's "Travellog," which has held the top market share in overseas debit cards for 34 consecutive months, surpassed 10 million subscribers earlier this month. Users can exchange 58 currencies for free through Hana Financial Group's lifestyle finance platform "Hana Money" app. Overseas payment and usage fees are also waived.
Competitors are mounting aggressive challenges. Shinhan Bank's "SOL Travel Check Card," launched in February last year, recently surpassed 2.7 million cardholders and 5 trillion won in domestic and international spending. Shinhan Bank plans to maintain its 100% exchange rate discount benefit for 42 currencies worldwide through the end of next year. Special interest rate benefits for dollar and euro deposits linked to SOL Travel cards will also be extended for the same period.
KB Kookmin Card, which operates "Travelers," is pursuing differentiated marketing by specializing in popular destinations such as Hong Kong and Macau. To celebrate the launch of its Macau Edition, KB Kookmin Card partnered with Melco Group, a major integrated resort operator in Macau, to offer 10% instant discounts on "House of Dancing Water Show" bookings from this month through March next year. KB Kookmin Card also launched a Hong Kong Edition in September in partnership with the Hong Kong Tourism Board.
The popularity of travel cards is expected to continue. The number of outbound travelers this year is projected to exceed the record 28.71 million set in 2019.
