BC Card, a local payment services provider, is set to make a foray into the U.S. market by expanding its successful domestic operations into the world’s largest credit card market, with the vision of becoming a "global payment services provider."

The move comes after the company successfully made inroads into the Chinese market where it launched the BC Card China., its corporate body in China, last year.

BC’s globalization drive has gained momentum since President and CEO Chang Hyung-duk took the helm of the company in March 2008. Unveiling a global vision, he has sought to expand the BC global network by strengthening its foothold in China and finding new opportunities in the U.S and Southeast Asia.

As a first step, the card firm has mapped out a plan to enter the U.S. market in the third quarter of this year by forming a business alliance with a U.S. network firm to enable Korean customers to enjoy BC card services there. Furthermore, BC plans to tap the Southeast Asian market.

The move is in line with Korea emerging as the world’s second largest credit card market ― the market has expanded at an explosive pace over the past three years. As a result, each South Korean holds an average of 3.78 cards as of August last year, trailing only the U.S. with 5.3 cards.

Despite such a strong customer base, domestic card issuers, including BC Card, still rely on global card firms’ payment services network for overseas transactions. Because of that, they have to pay 0.03 to 0.04 percent in royalties for using the network, while charging local cardholders a 1 percent fee for every transaction. In particular, local card firms must pay royalties even if there are no overseas transactions.

``Once our own global network is established, our customers will not have to pay fees for overseas use, while card firms can save royalties that otherwise would have been paid,’’ Chang said.

``We plan to make a foray into the U.S. market this year to provide ATM services there. In the long term, we plan to make it possible for our customers to use BC cards to purchase goods and services at U.S. shops,’’ he added. ``To that end, we are now seeking to form a business alliance with a U.S. network company.’’

BC Card also plans to enter the payment services market in emerging countries in Southeast Asia by commercializing its specialty in card system development and operations. Some countries in the region have already shown interest in importing the BC’s know-how in the area of local brand policy and credit card system establishment.

``We are confident about going global and our confidence is based on our expertise and know-how in the area of credit card processing that has been accumulated over the past 27 years,’’ Chang said. ``Our advanced card system will be available abroad sooner or later.’’

BC’s global network is expected to have great price competitiveness over existing international card issuers. That will provide a competitive edge for its member business partners as it will reduce fees associated with the issuance of international cards. Individual customers will also benefit from the network thanks to an expected fall in fees for overseas card use.

Globalization Not ‘Pipe Dream’

The main purpose of the BC’s globalization drive is to secure its own competitiveness in the international credit card market dominated by a couple of global card giants, such as Visa and MasterCard. It seeks to improve the efficiency of credit card processing and customer services operations to a global standard.

The firm has made the utmost efforts to find new business opportunities in other countries and seeks to expand its role by providing support for domestic card firms’ overseas expansion.

BC is not confining its business area to the credit card but expand to all kinds of payments cards, including check card, debit card and pre-paid card in order to maximize the customers’ value.

It also seeks to improve its service quality to the global standard by establishing the BC global network, which it believes will make it possible for BC cardholders to withdraw money from ATMs and purchase goods and services abroad without any inconvenience.

The BC’s successful entry into the Chinese market indicates that its plan to become a global player by entering new markets in the U.S. and Southeast Asia is not just a pipe dream.

The company entered the Chinese market in 2004 by forming a partnership with China UnionPay, an association for China’s banking card industry. In 2004 BC and UnionPay signed an agreement to share each other’s networks and has since maintained a partnership.

In March, the two companies jointly issued the Zhong Guo Tong card ― literally meaning ``Around China.’’ It has issued a total of 600,000 Zhong Guo Tong cards so far. Recently, the two introduced a Zhong Guo Tong Plus check card with which the user can pay for purchases and withdraw cash from an ATM.

The Zhong Guo Tong card is accepted widely both by member merchants and ATMs throughout China. There are as many as 740,000 Zhong Guo Tong-affiliated merchants in China. In addition, it does not incur additional transaction fees for BC cardholders.

Until now, major credit card companies in Korea have mostly collaborated with international card issuers such as VISA, MasterCard, and JCB. The partnership with a Chinese operator is the first of its kind. According to the terms of the agreement, BC will have exclusive rights to issue the Zhong Guo Tong card for three years in Korea.

BC set up its subsidiary in Beijing last year to expand its service network and help member business partners operating there. It is seeking to gain further foothold in China by strengthening its partnership with China UnionPay in many different areas.

On May 28, CEO Chang visited the head office of UnionPay in Shanghai and met the president Xu Luode to discuss ways to expand the partnership. Chang suggested a possible consulting service project for the rebuilding of UnionPay’s computing system in respect of its credit card operations.

The two parties are also discussing ways to enhance cooperation in areas of joint marketing to Chinese tourists to Korea and member service expansion within the Chinese market.