After President Lee Jae-myung ordered a system to convert card reward points into local currency, related ministries have begun formal discussions on institutionalizing the idea. With challenges including building a linked system, calculating settlement ratios and securing a budget, the process is expected to take considerable time before any formal regime is in place.
Major card companies are already moving to expand point-to-local currency conversion services, according to the financial industry Monday. NH NongHyup Card has offered the service since 2023, and KB Kookmin Card has done so since June 22, both working with operator Kona I to convert points at a rate of 1 point per 1 won.
KB Kookmin Card in particular allows customers to use its integrated KB Pointree rewards in the apps of 18 local governments nationwide, including the Cheonan Love Card and Gyeongju Pay. The conversion rate is 1 Pointree per 1 won, with a monthly cap of 10 Pointree. Starting Monday, the service was extended to Incheon's e-eum local currency platform, with plans to expand to more regions in the second half of the year. Other card companies are also actively reviewing whether to introduce similar services.
The discussions were set in motion by President Lee. At a Cabinet meeting on June 30, he said "tens of trillions of won worth of points accumulated through card payments or shopping membership sign-ups are sitting unused" and called for "a plan to convert these various points into local currency."
In response, the government formed a task force led by the Office for Government Policy Coordination, involving the Financial Services Commission and other related ministries, to work out the specifics. The FSC held a meeting with the Credit Finance Association and card companies on July 2 to discuss ways to use a unified point inquiry system. However, since card companies already offer a cash-deposit function for points, participants raised the view that linking each card company with local currency operators would be necessary to enable the conversion.
At a follow-up meeting of related ministries and industry representatives on July 10, participants also raised the need for a government-level integrated platform to cover a wider range of points, including those from shopping and airline programs.
Going forward, a key sticking point is expected to be membership points from non-financial companies that cannot be converted to cash. Card companies already running local currency conversion services calculate at 1 point per 1 won, but how to value non-financial company points and airline miles that cannot be cashed out remains an open question. Opposition from the retail sector, which has long used its own points as a marketing tool, is another hurdle.
Questions about the policy's effectiveness and the cost of incentives have also been raised. Critics note that allowing consumers to convert membership points they directly purchased back into local currency would yield limited policy benefit. Others argue that to steer people toward local currency conversion rather than simple cash redemption, clear incentives such as additional discounts or cashback — similar to those offered with existing local gift vouchers — would need to be built in.
Converting the wide variety of points, each with different operating systems and conversion ratios, into local currency is expected to require substantial review and preparation, including the development of a linked system, the designation of a managing body and the allocation of a budget.
As of June last year, unused credit card points stood at around 2.9 trillion won. When shopping, telecommunications and airline membership points and miles are included, the total sitting idle is estimated to run into the tens of trillions of won.
Meanwhile, the Ministry of Economy and Finance has identified strengthening locally led growth — including promoting regional consumption through card point-to-local currency conversion — as one of six key tasks in its second-half 2026 economic growth strategy.
won@heraldcorp.com
