Hyundai Card & Apple Pay Analysis

W5.
Apple Pay Launching

Decision
Table of Contents
1 Action Plan
2 External Analysis
3 Internal Analysis
4 Framework
5 Short-Term Revenue
6 Long-Term Revenue
7 Cost
8 Conclusion
COPYRIGHT 2023. SBABUSINESSSTRATEGYTEAM. ALL RIGHTS RESERVED

AGENDA 1 Action Plan
2 External Analysis
3 Internal Analysis
4 Framework
5 Short-Term Profit
6 Long-Term Profit
7 Cost
8 Conclusion
1 ACTION PLAN
To decide the appropriacy of Hyundai Card’s Apple Pay launch, we went through externalities
and company analyses by estimating revenue increase and cost incurrence.
1 Week
Key 1 Analyze simple payment industry, 2 Estimate the profitability of Apple Pay taking
Milestone Hyundai Card, and Apple Pay into consideration of external and internal factors
Key > Simple Payment Industry Analysis > Revenue Increase Estimation
Activities – How big is the market and how much will it grow? – How many users will newly flow into Hyundai Card due to Apple
Pay?
– Who are the key players and what are their success factors?
– How much annual membership fee and transaction fee will Apple
– What are key issues that affect players?
Pay create?
> Hyundai Card Analysis > Cost Incurrence Estimation

– How are the value chain and revenue model composed? – How much expense will NFC terminal installation require?
– What is the reason for introducing Apple Pay through the – How much commission will Hyundai Card pay to Apple?
preferential contract?
– How much expense will be used on marketing?
> Apple Pay Analysis

> Decision-Making
– What kind of service is it and how does it produce revenue in
different markets?
– What are the strengths and weaknesses of the service?
– What are the differences between global and Korean service?

AGENDA
1 Action Plan
2 External Analysis
3 Internal Analysis
4 Framework
6 Long-Term Revenue
7 Cost
8 Conclusion
2 EXTERNAL ANALYSIS
Simple Payment market is growing steadily,

while electronic financial firms actively increase market share.
Average Daily Usage of Share by Business Type of Simple Payment Business

Simple Payment in Korea Simple Payment in Korea Type in Korea
(bn, KRW) (by payment)
27
35 Electronic
723.1 46 50 Financial Firms
653.3
559.0
496.9
Financial
400.9 57 38 Firms
31 26
Cell-phone
27 24 24 Manufacturer
17
1H20 2H20 1H21 2H21 1H22 2016 2018 2020 2022
Cell-phone Manufacturer Financial Firms

Electronic Financial Firms
[Source] Bank of Korea [Source] Bank of Korea, Hana Bank
2 EXTERNAL ANALYSIS
Among Simple Payment services,

Samsung Pay shows high performance both in online and offline purchases.
Simple Payment Market Share in Korea Most Widely Used Simple Payment App in Korea
Online Purchase Offline Purchase (mn, persons)
15.77
15.02
9%
10%
2021
Naver Pay mostly 7.21 2022
6.82 7
operates online
2022 and has low
5.82
5.33
4.11
44%
(by payment) offline availability 3.71
4.16
3.26
2.83 2.26
2.36
37%
[Source] KPMG [Source] Wiseapp

2 EXTERNAL ANALYSIS
Samsung Pay shows highest online and offline versatility, alongside cross-bank compatibility.
Simple Payment Classification 1 Online & Offline Payment System
• Compatibility shows whether such payment

systems enables cross-bank payment
Versatility
• Versatility shows whether such payment

systems are applicable both online and offline Large number of Applicable both Able to register
affiliated stores online & offline various cards
2 Platform-Oriented Payment System
Points & additional Limited offline Able to register

benefits applicability various cards
3 Bank Issued App Cards
Large number of Applicable both Limited to bank

Compatibility affiliated stores online & offline associated
payment
2 EXTERNAL ANALYSIS
Samsung Pay shows highest online and offline versatility, alongside cross-bank compatibility.
Simple Payment Classification 11 Online

Online
& Offline
& Offline
Payment
Payment
System
System
• Compatibility shows whether such payment

systems enables cross-bank payment
Versatility
• Versatility shows whether such payment

systems are applicable both online and offline Large number of Applicable both Able to register
affiliated stores online & offline various cards
2 Platform-Oriented Payment System
Points & additional Limited offline Able to register

benefits applicability various cards
3 Bank Issued App Cards
Large number of Applicable both Limited to bank

Compatibility affiliated stores online & offline associated
payment
2 EXTERNAL ANALYSIS
Samsung Pay’s payment system successfully penetrated Korea,

and its recent collaboration with Naver Pay will further increase its potential.
Samsung Simple Payment System
Simple Pay Payment System Samsung Pay X Naver Pay

Successfully
APP Card NFC MS operating
Payment
Barcode NFC
MS Reader
Reader Reader
Able to use Samsung Able to use Naver Pay
Pay in online stores in offline stores
through Naver Pay through Samsung Pay
Affiliate
Convenient
Stores
260,000 2.2 bn
Supermarkets (10%) (100%) High affiliation
Fee
X O X Consumer Response
No fee
Barcode 12.9% 10.8% 40.8%
Expense
Initial
reader NFC reader

No expense
installation installation No additional Usage of only Usage of only Naver Usage of both
installation Samsung Pay in online Pay in offline stores Samsung Pay &
expense stores will grow will grow Apple Pay grow

AGENDA
1 Action Plan
2 External Analysis
3 Internal Analysis
4 Framework
6 Long-Term Revenue
7 Cost
8 Conclusion
3 INTERNAL ANALYSIS – APPLE PAY
Through Apple Pay business model, card issuers and Apple can generate profit.
To be specific, card issuers earn membership fee & transaction fee while paying for commission to Apple.
Apple Pay Business Model Key Takeaways
1 Membership Fee & Transaction Fee

Customer’s Members of card issuers have to
Customer Bank pay their annual fee
Merchants have to pay their

transaction fee to card issuers
Commission >
Card
Issuer
Apple 2 Card Issuers’ Commission to Apple
Profit of Card Issuer
0.15% of extra commission
has to be paid to Apple
Cost of Card Issuer
Card issuers are reluctant to

Merchant Merchant’s
Apple Pay due to the commission
Bank
3 INTERNAL ANALYSIS – APPLE PAY
Though Korean market is attractive due to its composition of loyal Apple customers and MZ,
Hyundai Card has to handle feature & terminal limitation, rejection to commission, and Samsung dominance.
Opportunities Threats
Feature Limitation Commission Burden
Loyal Apple Customer Base extra commission
• 91.9% of iPhone re-purchase intention 0.15% paid to Apple
• Purchase of iPhone, Mac, iPad, Apple Watch Public Transportation
• AirPods Max sold-out despite higher pricing Unavailable
• Reason for launching delays
Korean Samsung-Related • Can be imputed to customers
[source] SK telecom Companies Unavailable
Market
Analysis Terminal Dominance
Rising MZ trends & purchasing power Compatibility
offline payment
Age group
between 19-39
Open to Simple Payment,
especially Apple Pay
35% market share
2/3 of economically 60% of market smartphone

active population purchasing power 63% market share
NFC Terminal Installation Rate 2022
[source] gnnews [source] SBS [source] Wiseapp

3 INTERNAL ANALYSIS – HYUNDAI CARD
Despite Hyundai Card’s increasing operating income, its net income decreases.
1 Operating Income
Hyundai Card Financial Overview
(bn, KRW)
3,016
2,744
2,526 17.4% 43.4% 9.9%
2022 YoY
Operating Increased Credit Increased Usable
Income
Transaction Check Cards
Net Income Amount
245 314 254
2020 2021 2022 2 Net Income
Card Annual
Income 43.5% Affiliated Store
Commission Members Fee
Interest
42.7% Credit Card Installment Revolving -0.3%p +2.1%p 23.6%
Income Loans Fee Income 2022 YoY
Extra
Income 13.8% Other Business
Income
Affiliates
Income
Decreased
Affiliated Store
Increased
Interest Rate
[Source] Hyundai Card Commission
3 INTERNAL ANALYSIS – HYUNDAI CARD
Hyundai Card’s market share of member retention is 12%,

but is expected to increase due to growth of members.
Market Share of Major Card Companies in Korea Hyundai Card Member Growth
Hyundai Card Member Retention

Samsung (mn, persons) Growth Factor
13%
Withdrawal 0.73%
Rate Strengthened
Hana 0.61%
KB 0.56% competitiveness
13%
22% • Provide client lifestyle-
oriented products & services
• PLCC & Premium cards
11.04
2022 Expectation of Apple Pay
Hyundai • Increase of new subscription
(by members) # of 10.14
rate due to anticipation of
12% Members 9.78 Apple Pay
Lotte 2020 2021 2022

Shinhan
9% [Source] Hyundai Card
23% 40.8
Woori
8%
YoY Members Increase in
8.9% Growth in 2022
17.4% Transaction
[Source] Crefia
3 INTERNAL ANALYSIS

Hyundai Card’s Apple Pay Launching Plan Hyundai Card Member Retention
Samsung Growth Factor
Users
13%
can experience Apple Pay only through Hyundai Card for months
(mn, persons)
Withdrawal 0.73%
Rate Strengthened
Hana 0.61%
KB 0.56% competitiveness
13%
22% • >
Provide client lifestyle-
Apple Pay • PLCC & Premium cards
11.04
Launching Others
•
>
Increase of new subscription
(by members) Hyundai # of 10.14
Preferential 12% Members 9.78
End of rate due to anticipation of
Apple Pay
Preferential
Contract
Contract
Lotte 2020 2021 2022
Shinhan
23% 40.8
Woori
8%
8.9% Growth in 2022
17.4% Transaction
[Source] Crefia
3 INTERNAL ANALYSIS

Hyundai Card Member Retention

Samsung (mn, persons) Growth Factor
13%
Withdrawal 0.73% Increase Net Income Strengthened
KB
Hana 1 Increase User Rate 0.61%
0.56% competitiveness
13%
22% • Provide client lifestyle-
• PLCC & Premium cards
11.04
Hyundai • Increase of new subscription
(by members) # of 10.14
2 12%IncreaseMembers
Transaction
9.78
rate due to anticipation of
Apple Pay
Lotte 2020 2021 2022

Shinhan
23% 40.8
Woori
8%
8.9% Growth in 2022
17.4% Transaction
[Source] Crefia
AGENDA
1 Action Plan
2 External Analysis
3 Internal Analysis
4 Framework
6 Long-Term Revenue
7 Cost
8 Conclusion
4 FRAMEWORK
We combined external & internal insights and profit & cost estimation to conclude that Hyundai Card
should launch Apple Pay to increase user and transaction volume.
01 External / Internal Analysis + 02 Profit / Cost Estimation

= 03 Decision-Making
External Analysis Short-Term Perspective
P
R
O
F
I
T User Increase Transaction Fee Membership Fee
Key Players
Market Size C
Value Chain O
& Growth
S
T
Key Issues Terminal Cost Commission Marketing Cost
Internal Analysis
> Long-Term Perspective
>
Profit & cost are expected to fluctuate due to
Hyundai Card should introduce

• Feature
• Performance
• Status Quo Apple Pay in Korea
• Value Chain
• Strength
• Revenue Model
• Weakness
Increased Competition User Retention

4 FRAMEWORK
• • •
• •
•
• •
•
•
•
• •
•
•
• • •
•
• • •

AGENDA
1 Action Plan
2 External Analysis
3 Internal Analysis
4 Framework
6 Long-Term Revenue
7 Cost
8 Conclusion
5 SHORT-TERM REVENUE
We calculated the number of iPhone and Galaxy users willing to use Apple Pay based on market share and surveys.
# of Smartphone Users # of Users Willing to use Apple Pay

Premise 100% of population use smartphone
Total # of Galaxy to iPhone Aversion to Use Apple Pay Users

Total # of smartphone users:
51,414,281 32 mn 14% 4 mn
Domestic Smartphone Market
Share 3%
Samsung
Based on survey targeting galaxy users, # of Galaxy users willing to
14% have willingness to change their phone switch to iPhone to use
Apple
to iPhone to use Apple Pay Apple Pay
Others
34% 63%
Total # of iPhone Users Willing to Use Apple Pay
32 mn 79% 13 mn
[Intention to use Apple Pay]
Total # of Galaxy Users: 32mn
Total # of iPhone Users: 17mn Based on survey targeting iPhone users,

[Source] Counterpoint
79% have willingness to use Apple Pay
[Source] Consumer Insight
We predicted the number of new Hyundai Card subscribers with reference to survey
about Hyundai Card usage willingness and MZ generation preferences for debit card.
# Willingness to Use Apple Pay through # Hyundai Card New Subscribers
Hyundai Card
Hyundai Card Members among Galaxy Users # of new Hyundai Card Subscribers
4 mn 11mn 43% 4.7mn
Assumption
100% of Galaxy users who intend to [Total estimated # of [Hyundai Card new
Apple Pay users] issuance rate]
use Apple Pay use Hyundai Card
Increase in Issuance of Hyundai Debit Cards
Immediate Hyundai Card User Rate of iPhone Users Hyundai Card debit card issuance rate 43%
increased 43% due to the introduction of
13 mn 57% 7 mn Apple Pay
[# of iPhone users [Rate of Hyundai Card Dec, 2022 Jan, 2023
willing to use Apple Pay] Usage Willingness]
MZ gen, main target of Apple Pay, mainly use debit card so

Based on survey targeting iPhone users willing to use Apple Pay, that we primarily considered the increase rate of Hyundai
57% have willingness to use Apple Pay through Hyundai Card debit card
[Source] Card gorilla [Source] Credit Finance Association

Revenue gained from annual membership fees were calculated

based on the usage and variation of annual membership fees by card types.
Annual Membership Fee Revenue Estimation
Proportion of Credit/Debit Cards Average annual fee of Hyundai debit cards Total Annual Membership Fee Revenue
Usage of Payment Methods (2019) # of new Hyundai
Annual fee = ₩0 Annual fee = ₩2,000 debit card users
43.7% (Average annual fee
of debit cards) Debit ×
Average debit card
= (₩0*2 + ₩2,000*3)/5
26.4% annual fee
19.2%
= 1,200 KRW
+
# of new Hyundai
credit card users
Credit card Debit card Cash Average annual fee of Hyundai credit cards Credit ×
[Source] Bank of Korea Average credit card
annual fee
Estimation
30.5% Earnings from Number of Hyundai

Credit card Annual Membership Fee (2022) Credit Card Users
(units, persons)
Debit card 246 bn KRW 11 mn

Estimated revenue from
69.5%
annual membership fee
Ratio of usable Hyundai debit cards: 4,700,000*
19.2%/(19.2%+43.7%) = 30.5% (Average annual fee of credit cards) ((30.5%)*(₩1,200)
(₩246,000,000,000/11,000,000) + (69.5%)*(₩22,000))
Ratio of usable Hyundai credit cards: = 73,583,000
22,000 KRW
43.7%/(19.2%+43.7%) = 69.5% 74 bn KRW

We drew the equation for revenue from transactions based on the business model of Samsung Pay,
and distinguished transactions considering online and offline market.
Logic Flow of Forecasting Yearly Transaction Value
Basic Formula For Estimation

(# of Apple Pay users/# of Samsung Pay users)*(Samsung Pay yearly transaction value)*(Online/offline market share)*(Hyundai card commission fee)
±α (weight regarding market features)
Samsung Pay & Apply Pay: Hyundai Card Average Commission Fee
Share similarities in providing service, business model
→ Follow the statistics /data of Samsung Pay Hyundai Card Average Commission Fee
1 By Card Type (units, %)
Credit card Debit card
Monthly Average Number Samsung Pay Transaction Value (2022):
of Samsung Pay users (2022): 2.07 1.45
15.45 mn
(units, persons) 153.2 bn KRW / day [Source] Hyundai Card
[Source] Wiseapp [Source] Bank of Korea
Offline & Online Market 2 Ratio of usable Hyundai Ratio of usable Hyundai
Usage of Samsung Pay By Channel credit cards: debit cards:
Estimate for offline and online 69.5% 30.5%
Online market respectively
25%
Offline Market features and
75% Alter equation based on market
competitors differ in features and competitors
online and offline market (Average commission fee)
= 2.07%*69.5% + 1.45%*30.5% = 1.88%

We derived the yearly revenue of the offline market considering NFC terminals in Korea,
and the online market’s revenue considering competitors and Apple Pay’s potential.
Estimation of Yearly Revenue From Transaction Fee In Offline & Online Market
Offline Market Online Market
Market Share of Offline Simple Payment Market Online Market Status Quo Difficulties in penetrating the market
Others Samsung Pay Naver Pay & Kakao Pay
20%
is the sole major
1 prevailing the market
competitor
80% Apply Pay Market share over 50% +
should consider Increased market share Fall in Apple Pay’s
[Source] Hankokilbo of competitors growth rate
→ Apple Pay’s sales proportionally follow Samsung Pay’s sales
Samsung Pay &
2 Naver Pay MOU
NFC terminal • Most large scale stores Will gain only 90% of
penetration rate own NFC card readers Presumption the originally estimated revenue
10% • Large scale stores sales share: 50% (*This percentage was set arbitrarily)
Small number of online stores
3 accepting Apply Pay
→ Multiply by 50%, weighting more on sales share
Estimated yearly revenue gained

Estimated yearly revenue gained
from transaction in online market
from transaction fee in offline market
(4,730,000/15,450,000)*(\153,200,000,000*30*12)*(25%)*(1.88%)*(90%)
(4,730,000/15,450,000)*(\153,200,000,000*30*12)*(75%)*
(5,236,643/15,450,000)*(\153,200,000,000*30)*(75%)*(1.88%)
(1.88%)*(50%)= \131,787,696,433 119 bn KRW Apple Pay affiliated online stores = \79,072,617,860 71 bn KRW
= \ 21,964,616,072 = about 22 bn KRW

AGENDA
1 Action Plan
2 External Analysis
3 Internal Analysis
4 Framework
6 Long-Term Revenue
7 Cost
8 Conclusion
6 LONG TERM REVEUNUE
After the influx of other card companies, it is likely that market share of Hyundai card will return to current scale.
However, user numbers may slightly increase depending on the lock-in effects held on MZ.
Long Term: All card companies enter Apple Pay
Card Company Market Share According to the Card Company Market Share According to
User Numbers the Transaction Cost
MZ: 18-29, 30s
Shinhan 2091
5.8 %
KB 2026
19.6% 6.6 %
Samsung 1210
7.2 %
Hana 1196 2022

Transactio 9%
17.8 % n
Hyundai 1094
Cost
Market Share will return to current
Lotte 861 15.4 %
16 %
scale, but possibility of little
705
increase in users exist depending
Woori unit: 10000 ppl
[Source] The Bell 2022.12. [Source] on the lock-in effects held on MZ
Crefia
Status quo regarding market share of card companies Long term: After the influx

Both Apple Pay and Hyundai Card target MZ.

MZ has relatively higher preference for Hyundai card, implying huge potential for lock-in in long term.
Factors for MZ lock-in
Apple Pay Target Consumers Hyundai Card Target Consumers Card Preference According to Age
iPhone and Galaxy user rate according to age range Hyundai Card presented to focus on targeting MZ 5% 4% 6%
7%
18-29 52% 44% 3% 13%

14% 13%
16%
42% 53% 3%
30s
” 7% 12%
14%
10%
40s 16% 71% 11% 11%
17%
15%
15%
50s 4% 82% 12%
Percentage of MZ among 18%
Apple Samsung Others Hyundai Card Payment Cost and Frequency 17%
[Source] gallup 17%
15%
34
18-29, 30s are dominant users of iPhones, 31
who have a huge potential for using apple pay 22 17%
31 14% 15%
23 Payment 11%
Cost
18-29 30s 40s 50s
“ 36% of Galaxy users of MZ 18 Payment
36% Frequency
answered they will shift to iPhone KB Shinhan Samsung BC Hyundai Hana
if Apple Pay is available in Korea “ ”

MZ has higher preference for Hyundai card”
unit % 2020 2021 2022
[Source] VINU [Source] jowoncni
[Source] Hyundai Card

Cards targeting MZ and PLCC can contribute to customer lock-in within the period of Hyundai Card’s priority.
Cards Targeting MZ Generation Private Label Credit Card (PLCC) Cards
Hyundai Card- The Pink Users of The Pink Card according to Age PLCC is a store-branded card that is intended for use at a specific store
PLCC Issuance Status by Credit Card Company
Reflection of MZ’s
6.1% • 9 out of 10 PLCC : Hyundai Card
consuming
patterns 72 %
Market • TF Team for PLCC launch
Share : Target Customer
unit:
Card with shopping discount MZ others number of cards : Brand Identity
benefits : Maintenance of Monopoly
88.5 %
<Discount>
[Source] Congress
Hyundai Card- Z work Online Simple Payment Discount
Hyundai Card 320

Percentage of PLCC users among whole
PLCC Users
Online Shopping Food Delivery
11%
280%
32% The lock-in effect
of PLCC is proven
to be true, and
83
Hyundai Card has
dominance over it
Customized for commuter routes Convenient Public Franchise [Source] digital times
Store Transportation Smart order unit: 10000 ppl 2018 2022 2018 2022
Cards customized for MZ is indeed effective in increasing their Hyundai Card PLCC is intriguing huge number of customers who pursue exclusive
usage” benefits with high preference for a particular brand
6 CAPITALIZE
LONG TERM REVEUNUE
Integration with subscription economy, customization of Hyundai Card application and cultural shift
marketing are mainly targeting MZ, increasing the possibility of MZ customer retention.
Subscription Economy Hyundai Card Application Cultural Shift Marketing

Hyundai Card 3 Floor System MZ targeting: Hyundai Card Mobile App MZ targeting: Hyundai Card Super Concert
Package subscription
Percentage of Hyundai Card App Users by Age
3rd Floor Present with monthly fee
20s - 30s 40s-50s Others
45% 25% 30%

2nd Floor Subscription Phone GS 20% Exclusive Musician loved
Coffee
Care Pack
[Source] Etnews discount Ticketing by MZ
1st Floor
Basic Factors Contributing to Lock-in of MZ
Benefits Bee Pet Food E-book
Super Concert Tickets Purchased by Age
r • Online account book
Hyundai Card X Disney + Market Share of OTT Service
Functions • Help manage
100 consumptions through
alerts and notifications 30s
38.1% About 80% of Super
4 MZ MZ Concert tickets were
4 0
Targeting others
0 78.8 % 20s purchased by MZ
2016 2022 2025 40.7%
unit: trillion
Tone & Apple Pay
• Discounts, Payments in M point , 1+1 promotions
[Source]: Manner Integration
EBN
OTT benefits preferred by entire age groups” [Source] Interpark

• Infinite Scrolling • Synergy Effects (Apple Watch)
Subscription economy requires frequent and

Understanding of MZ trend and customizing the Distinct musician selection and exclusive benefits
constant payments, strengthening customer
application foster daily usage of Hyundai Card enhance MZ’s preference for Hyundai Card.
retention”
In the long run, Hyundai Card will lose part of its users due to entering of competitors.
1,320,000 3,348,750 822,500 5.5mn
Rate of MZ
Rate of Non-MZ
• Rate of MZ among MZ targeting card “The Pink” = 72%
• Rate of iPhone users willing to use Apple Pay = 80% 100% - Rate of MZ = 100% - 75% = 25%
Rate of MZ Apple Pay Users through Hyundai Card = 75%
Figures from 2022 3Q

Non-MZ Retention Rate
MZ Retention Rate
Retention: paying annual membership fees + actively transacting
Due to user retention strategy focused on MZ and
higher preferences toward other card issuers,
• Increased # of Users: 630,000 # of disaffiliated non-MZ retention rate is expected to be lower than that of MZ
• # of Newly Added Users: 1.21 mn & dormant users
590,000
Guesstimated Non-MZ Retention Rate = 70%

MZ Retention Rate = (4.7mn – 590,000)/4.7mn * 100 = 95%
We calculated the long-term revenue by adding card income and intertest income.
Card Income Interest Income

Commission + Annual Members Fee Credit Card Loans + Installment Fee + Revolving Income
Estimated revenue from Commission

From total Income,
(4,200,000/15,450,000)*(153,200,000,000*30*12)*(75%)* Card Income takes up 43.5% & Interest Income takes up 42.7%
(1.88%) = 212,084,000,000 • Income structure after Apple Pay launching will resemble this ratio
210 bn KRW
∴ Estimated interest income

Estimated revenue from annual membership fee
= Estimated Card Income * (42.7/43.5)
4,200,000 * ((30.5%) * (₩1,200) + (69.5%) * (₩22,000)) = 171 bn KRW * (42.7/43.5) = 219.88 bn KRW
= 86,108,000,000
66 bn KRW 168 bn KRW
Card Income = 138 bn KRW + 86 bn KRW = 171 bn KRW
Total long-term revenue is estimated as 339 bn KRW

AGENDA
1 Action Plan
2 External Analysis
3 Internal Analysis
4 Framework
6 Long-Term Revenue
7 Cost
8 Conclusion
7 COST
There are costs related to NFC card reader installation, commission fee and marketing.
These can be classified into short and long terms.
Short-Term Cost Long-Term Cost
Marketing Cost

7 COST
In the short run, Hyundai Card will expend cost for supporting NFC card readers to small-scale stores.
→ →
•
→

7 COST
Commission fee for both short and long term is in proportion to Samsung Pay’s transaction volume.
Commission Fee is subject to

all Hyundai Card transaction
through Apple Pay
Short-Term
11 mn
(Previous Insight)
Long-Term
5.5 mn
(Previous Insight)

7 COST
Hyundai’s short term marketing expense due to Apple Pay will escalate as it did during PLCC collaboration.
In the long run, marketing cost will increase 10% yearly due to new competitors.
Expected Marketing Fee

Increasing Trend of Marketing Fees Among Card Firms Short Term
(tn, KRW) 7.1409 7.2367
6.728 6.6964 One-off Initial Marketing Fee for Customer Attraction
5.3408 As card company
4.8215
competitions are 35 bn KRW increment in 2020 3Q
intensifying,
marketing fees ÷3 11.7 bn KRW
increase
accordingly
11.7 bn KRW Short term, One-off
2015 2016 2017 2018 2019 2020 increment for Additional Advertising
[Source] FSS
each project Fee for Apple Pay
Hyundai Card Advertising Expenses (Expected)
(bn, KRW)
67.2 68.9 Long Term
+35 bn 57.3
Hyundai Card’s Increased Marketing Fee due to New Competitors
KRW advertising
33.8 expenses Expected Marketing Fee Trend
27.6 increased 35 bn Approximately 10%
22 KRW when 67.2 68.9
57.3 rise each year
collaborating with
PLCC cards Hyundai card should gradually
increase advertising expenses to
defend customers from other
2017 3Q 2018 3Q 2019 3Q 2020 3Q 2021 3Q 2022 3Q
[Source] Dart card companies in the long term
2020 3Q 2021 3Q 2022 3Q (bn, KRW)
Starbucks, Baemin, Socar Card Releases
AGENDA
1 Action Plan
2 External Analysis
3 Internal Analysis
4 Framework
6 Long-Term Revenue
7 Cost
8 Conclusion
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W5.

Apple Pay Launching

COPYRIGHT 2023. SBABUSINESSSTRATEGYTEAM. ALL RIGHTS RESERVED

> Hyundai Card Analysis > Cost Incurrence Estimation

> Apple Pay Analysis

COPYRIGHT 2023. SBABUSINESSSTRATEGYTEAM. ALL RIGHTS RESERVED

Simple Payment market is growing steadily,

Average Daily Usage of Share by Business Type of Simple Payment Business

1H20 2H20 1H21 2H21 1H22 2016 2018 2020 2022

Cell-phone Manufacturer Financial Firms

Among Simple Payment services,

Online Purchase Offline Purchase (mn, persons)

[Source] KPMG [Source] Wiseapp

Simple Payment Classification 1 Online & Offline Payment System

• Compatibility shows whether such payment

• Versatility shows whether such payment

2 Platform-Oriented Payment System

Points & additional Limited offline Able to register

3 Bank Issued App Cards

Large number of Applicable both Limited to bank

Simple Payment Classification 11 Online

• Compatibility shows whether such payment

• Versatility shows whether such payment

2 Platform-Oriented Payment System

Points & additional Limited offline Able to register

3 Bank Issued App Cards

Large number of Applicable both Limited to bank

Samsung Pay’s payment system successfully penetrated Korea,

Samsung Simple Payment System

Simple Pay Payment System Samsung Pay X Naver Pay

reader NFC reader

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1 Membership Fee & Transaction Fee

Merchants have to pay their

Card issuers are reluctant to

2/3 of economically 60% of market smartphone

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2020 2021 2022 2 Net Income

Hyundai Card’s market share of member retention is 12%,

Hyundai Card Member Retention

Lotte 2020 2021 2022

Hyundai Card’s market share of member retention is 12%,

Hyundai Card’s market share of member retention is 12%,

Hyundai Card Member Retention

Lotte 2020 2021 2022

01 External / Internal Analysis + 02 Profit / Cost Estimation

Hyundai Card should introduce

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COPYRIGHT 2023. SBABUSINESSSTRATEGYTEAM. ALL RIGHTS RESERVED

# of Smartphone Users # of Users Willing to use Apple Pay

Total # of Galaxy to iPhone Aversion to Use Apple Pay Users

Total # of iPhone Users: 17mn Based on survey targeting iPhone users,

Increase in Issuance of Hyundai Debit Cards

MZ gen, main target of Apple Pay, mainly use debit card so

[Source] Card gorilla [Source] Credit Finance Association

Revenue gained from annual membership fees were calculated

30.5% Earnings from Number of Hyundai

Debit card 246 bn KRW 11 mn

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Hyundai Card & Apple Pay Analysis

Hyundai Card & Apple Pay Analysis

Hyundai Card & Apple Pay Analysis