According to the Financial Supervisory Service's electronic disclosure system, Blue Walnut recorded a net loss of 2.9 billion won last year, more than double the 1.2 billion won loss from the previous year. The company has now posted losses for nine consecutive years, accumulating a total deficit of 23.8 billion won since its inception.
Blue Walnut was founded in late 2016 under the leadership of Vice Chairman Jung Tae-young and other Hyundai Card executives as an electronic payment gateway (PG) subsidiary. Fully owned by Hyundai Card, it aims to establish a payment infrastructure for connected cars, focusing on services such as fuel, charging, and toll payments.
From the outset, Blue Walnut differentiated itself by collaborating with Hyundai Mobis to develop a service that allows payments via vehicle navigation systems without a physical card, targeting the connected car era. The company has steadily expanded its offerings, including payment services for rental cars and certified used cars. Last year, Blue Walnut generated 165.8 billion won in revenue from Hyundai Motor Group affiliates, a 16.2% increase from 142.6 billion won the previous year. This accounted for approximately 89% of its total revenue of 186.3 billion won, with payment processing fees related to Kia reaching 143.3 billion won.
However, the long-awaited in-car payment service, 'In-Car Payment,' from Hyundai and Kia was only officially launched in 2022, indicating that the company remains in the early stages of development. Renault Korea, which began its in-car payment service in 2021, discontinued it after about two years due to low usage rates.
The slow progress in expanding the in-car payment market, initially seen as a promising new business, has hindered Blue Walnut's ability to improve profitability. Industry insiders cite the low-margin structure typical of PG businesses and high initial investment costs as reasons for Blue Walnut's struggles. While the costs of building and operating connected car payment systems are significant, revenues are primarily limited to transaction fees.
Additionally, the company's business model, which focuses more on transactions within the group rather than expanding to external customers, limits its revenue diversification. With the domestic PG market already dominated by large players, new entrants find it challenging to secure stable revenue streams. For instance, Samsung Card sold its PG subsidiary Allat to KG Inicis in 2016.
An industry source noted, "The in-car payment business was approached more as a new business concept by Hyundai Card rather than being led by Hyundai Motor Group. Although Blue Walnut has conducted extensive research and development since its inception, it will require a long-term perspective for widespread adoption."
* This article has been translated by AI.
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