Payment cards were most preferred payment tool for e-commerce purchases in South Korea and accounted for 60.9% of payments made for online purchases in 2022, reveals the financial services consumer survey* by GlobalData, a leading data and analytics company.

An analysis of GlobalData’s E-Commerce Analytics shows that the South Korea e-commerce market was estimated to grow by 13.4% in 2022 to reach KRW138 trillion ($115.9 billion), as consumers increasingly shift from offline to online purchases. The market is set to increase at a compound annual growth rate (CAGR) of 9.7% between 2022 and 2026 to reach KRW199.6 trillion ($167.7 billion) in 2026.

Ravi Sharma, Lead Banking and Payments Analyst at GlobalData, comments: “South Korea’s e-commerce market is among the most developed in the world, supported by the country’s robust technology infrastructure, which ensures the availability of high-speed internet, rising smartphone penetration, high urbanisation, and growing number of tech-savvy customers. Furthermore, the COVID-19 pandemic has accelerated the trend with rapid shift in consumer preference from brick-and-mortar to online channel.”

According to GlobalData’s 2022 Financial Services Consumer Survey*, over 80% of the Korean consumers shopped online in the past six months while only 10% indicated never shopping online.

E-commerce payments in South Korea have traditionally been dominated by payment cards with credit and charge cards alone accounting for a 53.2% share in e-commerce payment value in 2022. This is due to the value-added benefits, including interest free instalment payment options, reward programs, cashback, and discounts associated with these cards.

Payment cards are followed by alternative payment tools which collectively accounted for a 27.3% share in 2022 – up from 15.0% in 2020. Alternative payment solutions such as Naver Pay, Samsung Pay, Kakao Pay and SmilePay are popular among the online shoppers.

Bank transfers are also used for e-commerce payments due to convenience and secured payment experience the payment method offers. However, its share has declineed from 12.7% in 2021 to 8.4% in 2022 due to growing preference for cards and alternative payment tools.

Sharma concludes: “Alternative payments are increasingly being embraced by Korean consumers for online shopping, a trend that is prevalent in many Asian markets. However, they still have a long way to go to challenge the dominance of payment cards.”

*GlobalData’s 2022 Financial Services Consumer Survey was carried out in Q2 2022. Approximately 50,000 respondents aged 18+ were surveyed across 40 countries.