A notice at the checkout counter of a Starbucks store indicating that the location is cashless. (Yonhap)
SEOUL, Feb. 11 (Korea Bizwire) — The combined net profits of South Korea’s four largest credit card companies fell nearly 8 percent last year, as lower merchant fees, tighter lending rules and higher borrowing costs squeezed margins across the industry.
Samsung Card, Shinhan Card, Hyundai Card and KB Kookmin Card reported a total net income of 1.8 trillion won in 2025, down 7.8 percent from a year earlier, according to industry data released Wednesday.
The decline erased gains made in 2024 and pushed earnings below levels seen in 2023, when market turmoil following the “Legoland” debt crisis sent interest rates sharply higher.
Industry analysts point to a government-mandated reduction in merchant commission rates, implemented in February 2025, as a primary factor. Korea Ratings estimated that the seven major card issuers collectively lost roughly 260 billion won in fee revenue last year, based on the scale of the policy change and market share.
At the same time, card loan businesses — which had helped offset weaker performance in core credit card sales — were hit by stricter lending regulations. Under rules introduced in late June, the government capped unsecured lending, including card loans, at 100 percent of a borrower’s annual income.
Higher market interest rates further weighed on profitability. The four companies’ combined interest expenses rose 4.8 percent to 3.23 trillion won last year.
Among individual firms, Samsung Card retained the top spot for net profit for a second consecutive year, earning 645.9 billion won, though its earnings slipped 2.8 percent from 2024. Shinhan Card followed with 476.7 billion won, down 16.7 percent.
Hyundai Card was the only major issuer to post higher profits, rising 10.7 percent to 350.3 billion won and overtaking KB Kookmin Card, whose net income fell 18 percent to 330.2 billion won.
In terms of individual membership, Shinhan Card remained the largest, with 14.15 million customers, though the gap with Samsung Card narrowed to roughly 860,000 members.
The earnings slide underscores the mounting challenges facing South Korea’s card industry, which is grappling with regulatory tightening and funding pressures at a time when consumer credit growth is slowing.
