"Card Companies Hit Hard by Boycott as Loyal Starbucks Customers Disappear"

PLCC Risks Surface
Woori and Samsung Card on Alert as Shinhan Card Reviews Launch
"No Noticeable Cancellations Yet"
Card Issuers Also Hit Hard When Brand Controversies Emerge

As the boycott movement spreads in response to the controversy over Starbucks' "Tank Day" marketing, credit card companies operating co-branded cards with Starbucks are closely monitoring the situation. Industry observers note that this has once again highlighted the structural risks of Private Label Credit Cards (PLCCs), which are closely linked to specific brands.

A Starbucks store located in downtown Seoul. Photo by Yonhap News

According to the card industry on May 25, Woori Card, which recently launched the "Star Travel Woori Card," and Samsung Card, which introduced the "Starbucks Samsung Card" last year, are currently monitoring the impact of the controversy. It is reported that there has not yet been a noticeable increase in card cancellations.

Shinhan Card had initially reviewed the launch of a Starbucks co-branded card in the first half of the year, but has decided to reschedule the launch in light of internal system checks and recent controversies. However, it is understood that none of the card companies are currently at the stage of reconsidering their co-branding agreements altogether.

Starbucks had previously maintained an exclusive partnership with Hyundai Card, but changed its strategy last year to collaborate with multiple card issuers. From the perspective of the card companies, they had expected to acquire more customers based on Starbucks' strong brand loyalty, but have now faced unforeseen risks from the early stages of business expansion.

Recently, as profitability has deteriorated due to lower merchant fees and stricter lending regulations, card issuers have been actively expanding PLCC partnerships with major platform brands such as Baedal Minjok and Musinsa. While PLCCs are effective in attracting loyal customers due to their brand-specific benefits, there is also the limitation that if a controversy arises involving a partner company, the card issuer may be directly affected.

An industry official explained, "PLCCs have the advantage of quickly building a brand's fan base, but the risk must also be assumed if a boycott or brand image damage occurs."

However, some expect the overall market impact to be limited. Kim Taehyun, Head of Financial Division 1 at Korea Ratings·KR, said, "Card companies are strengthening their PLCC business to secure a stable profit base," adding, "There may be some impact on individual performance, but it is unlikely that the market as a whole will be significantly shaken."

This content was produced with the assistance of AI translation services.