Lotte Card

A domestic specialized credit finance company (credit card company) that originated in the Lotte Group affiliates and has MBK Partners as its largest shareholder, known for the 'LOCA' and 'Digi-LOCA'

Lotte Card

Overview

Lotte Card Co., Ltd. (롯데카드) is a specialized credit finance company engaged in domestic credit card issuance and payment and financial services. It was launched in 2002 when the credit card division of Lotte Department Store was spun off. It was once a financial affiliate of Lotte Group, but in 2019, when private equity firm MBK Partners acquired a controlling stake, its structure changed to that of an independent card company. With 'LOCA' and 'Digi-LOCA' as its representative brands, it differentiates itself through membership linkages with Lotte retail affiliates and a digital-centered card lineup.

Key Details

History

  • 2002: Established Lotte Card Co., Ltd. by spinning off the card business division of Lotte Department Store.
  • 2004: Expanded into leasing and installment financing through the merger and absorption of Lotte Capital.
  • 2010s: In the process of reorganizing financial affiliates, the capital division was separated, and the structure was reorganized around the core card business.
  • 2019: The MBK Partners consortium acquired a controlling stake (approximately 60%) from Lotte Group.
  • 2021–2023: Sequentially launched the digital-only card brand 'Digi-LOCA' lineup, shifting to a mobile-centered model.

Governance and Ownership

Since MBK Partners became the largest shareholder in 2019, Lotte Card has been classified as an independent card company rather than a group affiliate. However, partnerships with Lotte Department Store, Lotte Mart, Lotte Hi-Mart, Lotte Cinema, and others, as well as L.POINT linkage, remain core competitive strengths. As resale has been pursued repeatedly, financial holding companies such as Woori Financial Group have been mentioned as potential buyers, and the market landscape has continued to shift depending on the acquirer and valuation.

Major Products and Brands

  • LOCA series: A lineup segmented by performance and benefits, including 'LOCA LIKIT', 'LOCA 365', and 'LOCA M'. Characterized by discount and rewards designs.
  • Digi-LOCA: A digital card brand emphasizing app-based issuance and card design customization. It targeted the MZ generation with themed cards based on city concepts such as London, Las Vegas, and Jeju.
  • Affinity cards: Cards specialized for Lotte retail affiliates, cards in partnership with telecommunications, fuel, and simple payment services, and co-branded products in the form of PLCC (private label credit card).
  • Additional services: Traditional card ancillary services such as overseas payments, installment and revolving payments, card loans, and auto installment financing, as well as app-based lifestyle finance services.

Business Performance and Market Position

It is evaluated as a mid-sized major player with a market share in the 5th–6th range among domestic card companies, following Shinhan, Samsung, Hyundai, and KB. The number of members is cited at around 10 million, and total assets are cited at around KRW 20 trillion. Its revenue structure consists of merchant fees, financial income such as installments and card loans, and partnership marketing revenue, and it is sensitive to cuts in preferential merchant fee rates across the card industry and fluctuations in funding rates.

Digital and IT Strategy

Lotte Card is cited as a relatively early case in the industry of adopting an application-first strategy. It built a structure in which card applications, delivery, and benefit confirmation are completed in the app, and through the Digi-LOCA brand it attempted marketing that positions the card itself as a 'fashion and taste consumer good.' It is also expanding investment in data-based credit assessment, personalized benefit recommendations, and customer consultation automation using generative AI.

Marketing and Social Contribution

Representative examples include brand campaigns using celebrities and sports stars and limited-edition card design collaborations. It has also carried out social contribution activities such as support for small business owners, education for financially vulnerable groups, and sponsorship of children and adolescents.

Recent Trends (2024–2025)

  • Stake resale issue: MBK Partners' sale of its Lotte Card stake has continued to be pursued, and financial holding companies such as Woori Financial Group have been mentioned as acquisition candidates. Some negotiations failed due to differences over price, and the timing and owner of the sale remain variables.
  • Profitability pressure: As profitability across the card industry has worsened due to high-interest funding costs, merchant fee regulations, and rising delinquency rates, a shift toward cost efficiency and operations centered on high-quality assets is underway.
  • Diversification of core business: Beyond simple payments, the trend of expanding revenue sources through PLCC expansion, combined lifestyle finance and membership products, and overseas payment partnerships is notable.
  • Intensifying digital competition: Amid competition with simple payment providers and internet banks, strategies to increase app dwell time and data utilization have emerged as key tasks.

Related Topics

  • [[Lotte Group]]
  • [[MBK Partners]]
  • [[Woori Financial Group]]
  • [[Credit card]]
  • [[Specialized credit finance business]]
  • [[Digi-LOCA]]