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| Samsung Card CEO Won Ki-chan, right, poses with Shinsegae Simon CEO Cho Chang-hyun after signing a business alliance at the card firm's head office in central Seoul, Wednesday. / Courtesy of Samsung Card |
A growing number of financial firms are partnering with retailers in a bid to diversify revenue sources and expand their business portfolios.
Samsung Card said Wednesday it has signed a strategic partnership with Shinsegae Simon, a retail joint venture between Shinsegae and U.S.-based commercial real estate management firm Simon Property Group.
Operating four outlet branches across the country, Shinsegae Simon posted 1.3 trillion won in sales last year.
Under the deal, the two parties are set to introduce an affiliate credit card product with mileage benefits for customers who shop at the retailer's branches. In the meantime, Shinsegae Simon is expected to utilize Samsung Card's big data system to analyze customers' consumption patterns.
"Koreans hold 3.6 credit cards per person. The nation's credit card market is pretty saturated," a Samsung Card officialsaid. "It is essential for a card firm to join hands with a sizable retailer."
Shinsegae Simon believes Samsung Card's big data system will help secure more customers and boost its sales. The card firm's big data system is said to have contributed to sales of E-mart Traders when Shinsegae Group's discount warehouse chain opened new branches in March and December.
Earlier this year, Hyundai Card entered into an exclusive partnership with Costco, a U.S.-based warehouse retail chain. The chain had partnered with Samsung Card when it entered the Korean market, but changed its sidekick to Hyundai Card which offered better terms.
Under the exclusive deal, only Hyundai Card holders are allowed to use their credit cards at Costco's branches across the country.
Not only card firms but also banks are strengthening their ties with retailers.
Shinhan Bank has recently joined hands with Korea Seven, the operator of convenience store brand Seven Eleven. Under the deal, customers are allowed to use SOL, the lender's banking app, at Seven Eleven convenience stores across the country.
Seven Eleven also plans to feature Shinhan's unmanned banking system in available space at its branches.
Separate from its partnership with Seven Eleven, Shinhan also started operating a cooking class jointly with CJ CheilJedang this month.
Woori Bank has set up a taskforce designed exclusively for seeking opportunities with retailers.
"Woori Bank plans to introduce a drive-thru banking system in October. For the system's soft landing, it is essential for the bank to join hands with retailers," a Woori Bank officialsaid.
Woori Bank added it is in talks with about 10 domestic retailers to jointly roll out the system.
