Going to Convenience Stores to Withdraw Money

Convenience stores not only provide banking service via ATM and serve as channel to make reservations for movie and sports game tickets, but also serve as distribution channel via business alliance with online shopping malls and delivery service providers. Financial service in convenience stores is to be expanded, as the banking sector is to introduce 5-day workweek system from 1st of Jul.

▽Expansion of financial service in convenience store〓People can make payments for their phone and cellular phone services and utility fee in convenient stores. In addition, they can withdraw and deposit money through ATM in the stores. Recently, some stores provide insurance policy related services and stock trading services as well. With its strong point that it runs for 24hr/d throughout the year, convenience stores will likely replace banks providing banking services in the weekends.

LG 25, with 900 chain stores, will install ATM in some 70% of its chain stores, an increase from the current 60%. LG25 began by providing service of receiving payment for insurance fees of LG Insurance and Dongbu Insurance since Nov. last year. Korea Seven operates 1100 of 7 ELEVEN stores. Some 50% of the stores are installed with ATM and the company plans to increase the proportion to 80% this year. It will also begin with services of receiving insurance fees and of reserving various tickets for customers.

According to Convenience Store Association, some 76.6% of convenience stores nationwide are providing the service of receiving tax and collecting public utility fees, and around 41.3% of the stores are equipped with ATM.

▽Emerge as distribution center〓Convenience stores are recently implementing business in alliance with delivery service providers and online shopping malls. They are delivering goods with their nationwide network. LG25 forged alliance with 4 online shopping malls in Mar. and launched on service that enables customers of the shopping malls to pick up their delivered good in a nearby LG25 store. Korea Seven has embarked on trial operation of the service after forging alliance with LOTTE. Com. e-CVS Net, a joint venture created with investment from LG25, family-mart, and Buy the way, forged alliance with Korea Express. e-CVS Net utilizes 2300 chain stores of the convenience stores. Whenever a company hand over a product, it is delivered to the target destination. Next year, the joint venture plans to forge alliance with a TV shopping mall and provide service of collecting returned goods in convenience stores. 7 ELEVEN is providing a service that delivers goods when HYUNDAI Express hand them over to the company.

Heon-Jin Lee mungchii@donga.com