The average monthly rent in Seoul has surpassed 1.6 million won for the first time, indicating growth in the rental market. However, the market for rent payments by credit card has not expanded as expected. While usage increased until last year, the growth has stalled this year due to high barriers such as the need for landlord consent, document submission, and fee burdens.
On September 22, data submitted by the offices of Kim Sang-hoon, a lawmaker from the People Power Party, revealed that the total amount of rent payments made by credit card through Shinhan, Hyundai, and Woori Cards in the first half of this year was 6.8 billion won, with 8,647 transactions recorded. When annualized, this amounts to approximately 13.6 billion won and 17,294 transactions, slightly below last year's figures.
The rent payment by credit card market had shown growth until last year. The transaction volume for these three companies increased from 10.6 billion won in 2023 to 14.2 billion won last year, marking a 34% rise over two years. During the same period, the number of transactions grew from 15,719 to 18,721, a 19.1% increase.
This service allows tenants to pay their rent via credit card instead of cash or bank transfer, provided the tenant applies for the service and the landlord consents. It can be used within a certain limit, with fees typically around 1%.
Since being designated as an innovative financial service in 2019, the rent payment by credit card has been operated primarily by a few card companies. Following regulatory updates by the Financial Services Commission in May last year, card companies can now offer rent payment by credit card as a secondary service without undergoing the designation or extension review process, simply by changing their terms.
Despite regulatory improvements and an increase in the proportion of monthly rents in the rental market, actual usage has not significantly increased. Although the institutional barriers to entry have been lowered, challenges remain at the usage stage, including the need for landlord consent, document submission, and fee burdens.
Currently, to pay rent with a credit card, tenants must submit documents such as a resident registration certificate or lease agreement to verify their residency. Some card companies also require additional documents, such as a business registration certificate, when individual business owners pay rent with a card.
The exposure of landlords' rental income is also seen as a barrier to market expansion. Since landlord consent is required for card payments, many landlords are hesitant due to the transparency of their rental income through card transactions. Additionally, determining who will bear the 1% fee—landlords or tenants—further complicates the expansion of usage.
As a result, participation from other card companies has been limited. Currently, only Shinhan, Hyundai, and Woori Cards offer rent payment by credit card services. Samsung Card ended its service in 2024, and other card companies have not announced plans for new or renewed entries into the market.
A representative from the card industry stated, "Due to barriers such as the exposure of landlords' rental income, mutual consent between landlords and tenants, and fee burdens, it is challenging to expand the service. While the market size is still small, we are providing the service to enhance customer convenience."
* This article has been translated by AI.
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