November 27, 2024

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From left: BC Card CEO Choi Won-seok, IPC CEO Jamangulova Kanykei Joluchuevna and Smartro CEO Jang Gil-dong pose for a photo after signing an agreement to form a joint venture in Kyrgyzstan's capital city, Bishkek, on Friday. (BC Card)

South Korean credit card issuer BC Card announced on Sunday it has decided to establish a joint venture with a Kyrgyz state-run payment provider to offer a unified card payment processing service in the central Asian country.

The joint venture firm, called BC Card Kyrgyzstan (BCKG), will be set up in Kyrgyzstan's capital city, Bishkek, in August in collaboration with two firms -- Korean payment services firm Smartro, and Kyrgyz state-run payment provider Interbank Processing Center (IPC).

"BCKG will not only drive payment innovation in Kyrgyzstan but also play a pivotal role as a stepping stone for the digital payment transformation in neighboring Central Asian countries with similar cultures and environments,” BC Card CEO Choi Won-seok said in a statement.

BCKG’s total capital is valued at 1.044 billion som ($11.88 million), with BC Card holding a 52.5 percent share, and IPC and Smartro sharing 30 percent and 17.5 percent shares, respectively.

Kyrgyzstan's payment infrastructure has been segregated by banks, which makes it inconvenient for merchants as they have to install multiple terminals and also bear high fees.

That means only a small percentage of local businesses, about 3 percent -- around 13,000 stores -- were equipped to accept card payments, as of the end of last year.

Most transactions in Kyrgyzstan -- 95 percent -- are made in cash, but non-cash payments are rapidly increasing.

Total card usage amounted to $9.96 million as of the end of 2022, showing a 129 percent increase in the transaction value compared to the previous year, according to a Kyrgyzstan Central Bank report.

The three firms' heads signed an agreement to establish the joint venture on Friday in Bishkek, BC Card said.

It followed after a memorandum of understanding was signed in Kyrgyzstan in May.

Along with establishing a unified payment system, various payment methods using measures such as QR codes and NFC will be made available using BC Card's global payment solution Beyond Acquiring Integrated System.

The joint venture will also offer customized services according to the size and environment of each merchant using Smartro's technology.

Also, the company plans to provide online payment gateway services to flexibly respond to e-commerce environments.

By Song Seung-hyun (ssh@heraldcorp.com)