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Press Release

~2022 Contents
Title Corporate card purchase in restaurants has dropped by 8.9% post Kim Young-Ran Act Date 2016.10.03

BC Card announces changes in card use pattern post Kim Young-Ran Act
Corporate card purchase in restaurants has dropped by 8.9% post Kim Young-Ran Act

  • Corporate card use in expensive restaurants has dropped significantly… due to a decrease in entertaining or wine/dining clients
  • The number of transactions by personal cards has increased… showing signs of more people splitting checks and paying their bills separately

Since the enforcement of ‘Improper Solicitation and Graft Act (Kim Young-Ran Act)’ on September 28th, corporate card use in paying for meals and liquor has decreased in purchase volume.

BC Card (President and CEO, Joon Hee Suh, www.bccard.com) has released a big data analysis report stating a decrease of corporate card purchase volume in restaurants and bars by 8.9% and 9.2% respectively during the two days directly after the enforcement of Kim Young-Ran Act (9/28~29) compared to the same period four weeks prior. [See <Table 1> for reference]

<Table 1> ‘Percentage Change in Card Purchase Volume’ - Wednesday, Thursday 4 weeks prior Kim Young-Ran Act (8/31~9/1) VS Wednesday, Thursday post Kim Young-Ran Act (9/28~9/29)
Merchant Category Corporate Card Personal Card
Restaurant(Hanjeongsik (Korean Table d’hote),
Chinese, Japanese, Western, Galbi, Korean)
-8.9% -3.4%
Bar/Pub -9.2% -9.2%

Corporate card use in Hanjeongsik (Korean Table d’hote) restaurants has shown the sharpest drop, 17.9% in purchase volume, followed by Chinese restaurants with a 15.6% decrease. Comparing the data to that of the week prior to the Act enforcement, corporate card purchase volume in Hanjeongsik restaurants has decreased by 0.1% and in Japanese restaurants by 6.0%. BC Card Big Data Center has analyzed that one of the factors behind the falling numbers is a decrease in guest entertaining. [See <Table 2> for reference]

<Table 2> ‘Percentage Change in Card Volume by Corporate Cards’ - Wednesday, Thursday prior and post Kim Young-Ran Act
Sort Percentage Change in
Corporate Card Volume
4 Weeks Prior Act Wed, Thurs (8/31~9/1) vs Post Act Wed, Thurs (9/28~29)
Ranking of percentage change in corporate card use per merchant category
Hanjeongsik (-17.9%)>
Chinese (-15.6%)
1 Week Prior Act Wed,Thrus (9/21~9/22) vs Post Act Wed, Thurs (9/28~29)
Ranking of percentage change in corporate card use per merchant category
Japanese (-6.0%)>
Hanjeongsik (-0.1%)

Number of transactions by corporate cards has also dropped. Comparing the number during Wednesday and Thursday post the enforcement (9/28~29) to that of 4 weeks prior (8/31~9/1), restaurant category has shown a 1.7% decrease and bar/pub category a 6.1% decrease. Number of transactions by personal cards has shown a similar decline in these merchants. [See <Table 3> for reference]

<Table 3> ‘Percentage Change in Number of Transactions’ - Wednesday, Thursday 4 weeks prior Kim Young-Ran Act (8/31~9/1) VS Wednesday, Thursday post Act (9/28~9/29)
Merchant Category Corporate Card Personal Card
Restaurant(Hanjeongsik (Korean Table d’hote),
Chinese, Japanese, Western, Galbi, Korean)
-1.7% -2.4%
Bar/Pub -6.1% -6.4%

However when comparing the data with that of one week prior the Act, the number of transactions by personal cards shows a surprising increase. This could be interpreted that cardholders who did not use their personal cards for meals have turned to use their own cards after the enforcement of the Act. [See <Table 4> for reference]

<Table 4> ‘Percentage Change in Number of Card Transactions’ - Wednesday, Thursday 1 week prior (9/21~22) and directly post Kim Young-Ran Act (9/28~29)
Merchant Category Corporate Card Personal Card
Restaurant(Hanjeongsik (Korean Table d’hote),
Chinese, Japanese, Western, Galbi, Korean)
-0.8% 0.3%
Bar/Pub 2.0% 2.1%

As for corporate card purchase volume per transaction, it has decreased by 7.3% in restaurants and 3.3% in bar/pubs. This means that average ticket size in these merchants are decreasing and BC Card analyzes this is due to the price limit set by Kim Young-Ran Act. [See <Table 5> for reference]

<Table 5> ‘Percentage Change in Average Ticket Size’ - Wednesday, Thursday 4 weeks prior (8/31~9/1) and directly post Kim Young-Ran Act (9/28~29)
Merchant Category 8/31~9/1 9/28~29 Percentage
Change
Restaurant(Hanjeongsik (Korean Table d’hote),
Chinese, Japanese, Western, Galbi, Korean)
55,994Won 51,891Won -7.3%
Bar/Pub 156,013Won 150,923Won -3.3%

BC Card has checked the direct aftermath of Kim Young-Ran Act: an overall decrease in corporate card use. BC Card will continue to utilize data big data analysis to predict consumer lifestyle pattern and provide better marketing and services for its clients.

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