South Korea’s credit card issuers are branching out into other sources of income amid low profitability caused by reduced fees levied on small retailers.

The country’s eight largest card issuers posted a combined net profit of 2.05 trillion won ($1.72 billion) last year, down 7.8 percent from 2.2 trillion won a year ago.

According to industry sources on Tuesday, Shinhan Card Co. plans to launch a driver-for-hire-service available through its card app on a mobile device sometime in April. The company said it will not receive any extra fees except for merchant fees from driver-for-hire companies, adding the new service will rather strengthen its foothold in the field of online-to-offline (O2O) service. The company also considers a business related to big data consulting and long-term car rental.

Samsung Card Co. also joined hands with Samsung Electronics Co. to launch a service dubbed “Galaxy Club,” which allows consumers to buy Samsung Electronics’ Galaxy S7 and Galaxy S7 Edge smartphones on a 24-month installment plan and to replace old models with new ones one year after purchasing. The company will also be engaged in reselling returned smartphones.

BC Card Co. aims to release its own private brands (PB) in retail business, a rare attempt for a card issuer. The company will sell its own PB products online in collaboration with small manufacturers with good technology. It also plans to enter the real estate business by leasing its vacant office space in three company buildings.

Lotte Card Co. is working on broking overseas study programs, allowing visitors to its website to get a discount or other benefits when they use Uhak.com services, a local consultancy for overseas education. Lotte Card will begin the service from May or June in time with its arrangement of an English learning program.

KB Kookmin Card Co. launched a Hallyu-themed online shopping mall last October for Chinese shoppers. KEB Hana Card Co. is preparing for a mobile payment service WeChat Payment for Chinese tourists.

By Chung Ji-sung

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]