Let’s look into PLCC, which frequently appears in the Korean and international credit card market.
Recently, there has been a great news for the Starbucks regulars; it was about Starbucks Korea and Hyundai Card launching a Starbucks exclusive credit card through their PLCC alliance agreement. The public was greatly interested as it’s quite unusual to launch a credit card related to food and beverages (F&B) brand. PLCC, which is short for Private Label Credit Card, refers to a credit card operated by a company that wishes to have its own credit card with a card company. It focuses on credit card benefits and service, etc., on the said company. PLCC card mainly is used in the U.S., but it has made its way to the Korean credit card industry lately. Let’s look into PLCC, which is all the rage these days within the domestic and international credit card industry, shall we?
A Card that Provides Optimum Benefits Regarding an Alliance Company
PLCC provides optimum benefits for the company that forms alliance with a credit card company.
PLCC uses the brand that forms alliance with a credit card company and provides optimum benefits regarding the said brand for the customers. As the brand company leads formation of the benefits, it’s abundant with benefits that regard the said brand. The credit card company and the alliance company share the product related costs and the profits. Based on customer data, they sometimes promote joint marketing as well. It may sound similar to alliance credit cards, but they are of different concepts. Alliance credit cards allow the credit card companies alone to take care of alliance company benefit related costs and the credit card profits. In addition, alliance credit cards allow one company to form alliance with various credit card companies whereas PLCCs are operated through a contract with a single credit card company.
In America, where PLCC is actively operated, a PLCC based on Apple Pay was launched recently (photography source. Apple Pay homepage).
PLCC is popular abroad as well. PLCC already once peaked in America. According to Medici, a fin-tech expert media, more than 1.9 billion PLCCs were issued by the end of 2015. Considering how there are around 330 million people living in America, this is about everyone having more than one PLCC; it’s as close to their everyday lives now. Not only global distribution companies like Amazon, Target, Walmart, etc., but also fashion brands like Victoria’s Secret and GAP have their own PLCC product. Apple even launched an Apple Pay based PLCC with Goldman Sachs and Mastercard. The scope of PLCC goes beyond distribution business but is being expanded to simple payment business. This flow can be seen in Korea as well. Simple payment company Toss formed an alliance with Hana card and launched ‘Toss credit card.’ NHN’s simple payment subsidiary, NHN Payco, developed PLCC products with Samsung card and Lotte card.
The Advantage of Attracting Loyal Customers
PLCC credit card attracts loyal customers for an alliance company.
Why do domestic and international credit card companies continuously launch PLCC products? It’s because they can utilize PLCC as a marketing platform to attract highly loyal customers. According to Auriemma consulting group’s credit card related research, about 30% of PLCC or Co-brand Card customers said that they spent more at the brand affiliated stores while 73% said they felt loyal to the brand. Customers who often use PLCC brand has a definite advantage of using PLCC as they would receive certain benefits compared to using other credit cards. In the end, it’s a win-win situation for everyone; customers, credit card companies and alliance companies. That’s why launching a PLCC product by forming alliance with a company that has many loyal customers is a way for a credit card company to grow.
Hyundai Card Aggressively Launches Their PLCCs.
eBay Korea PLCC credit card, ‘smile card,’ recorded 860,000 members in just 2 years since launched with ample benefits.
Korea’s leading credit card company that aggressively launches PLCC products is Hyundai Card. In June 2018, they introduced a PLCC credit card ‘smile card’ with eBay Korea. It accumulates 2% of what you spend in Smile Cash in eBay open markets like G market and Auction, which is almost 7 times the basic accumulation rate, and 1% of your payment in other affiliated stores which is more than 3 times the basic accumulation rate. You can use your accumulated Smile Cash in all Smile pay affiliated stores including G market and Auction just like cash without any limitations regarding scope or conditions, etc. In just 2 years since its release, about 860,000 smile cards were issued thanks to its simple issuing procedure and unprecedented benefits. Last year, 2 types of Costco PLCC credit cards were introduced. They are ‘Costco Reward Hyundai Card’ and ‘Costco Reward Business Hyundai Card.’ You can accumulate up to 3% of your spending with this credit card at Costco. Accumulated Costco Reward points can be exchanged into vouchers provided every December and can be used like cash.
With Korean Air, Hyundai Card created the first ever airline credit card in Korea.
This year, Hyundai Card developed an even stronger PLCC product. It’s been forming alliances with the no. 1 companies in various industries and have released their PLCC credit cards. Last month, they introduced the Korean Air PLCC credit card. Many people paid attention as it is the first ever airline credit card in Korea. All credit card benefits and rewards are provided in relation to Korean Air benefits while additional mileage accumulation and travel specialized services are also provided for the clients to enjoy optimum flight life benefits. They have also contracted a PLCC partnership with Starbucks and notified that they would be introducing Korea’s first coffee brand credit card. Since entering the Korean market, Starbucks has not yet launched any sort of PLCC or even a general alliance credit card, which left people anticipating the upcoming benefits. Starbucks PLCC credit card is to introduce Starbucks-focused benefits and services to meet such anticipation of their loyal customers.
We’ve so far looked into PLCC, a credit card specialized for a specific company. If there is a brand that you are interested in and use frequently, it would be beneficial for you to have their PLCC. Hyundai Card, which has launched PLCCs with Costco, eBay Korea, etc., has recorded no. 1 in the customer increase rate for the past year among the big 7 credit card companies. PLCC definitely helps with the credit card company’s marketing strategy as it appeals to the customers. What other companies will Hyundai Card form alliances with and launch their PLCC? Here’s looking forward to their surprising, abundant benefits.
