S.Korea's BC Card to enter Kyrgyz payment market

South Korea's BC Card will make a full-fledged entry into the Central Asian payment market by establishing a card payment joint venture in Kyrgyzstan.

BC Card said Sunday that it will establish August this year BC Card Kyrgyzstan (BCKG), a card payment processing joint venture, in partnership with South Korea's value-added network (VAN) Smartro and Kyrgyzstan's state-owned payment operator IPC in the country's capital Bishkek.

The three companies signed on July 21 a shareholders' agreement for establishing the joint venture. The total capital of BCKG will be 1,044 million som ($11.9 million), with BC Card holding 52.5%, IPC and Smartro holding 30% and 17.5% respectively.

Until now, payment infrastructure in Kyrgyzstan has been scattered among various banks, leading to complex and inefficient payment processing. As of the end of last year, only about 3% (13,000 locations) of local businesses were capable of taking credit card payments.

To boost the card industry, the Kyrgyzstan government selected BC Card, South Korea's largest payment processing company, as a strategic partner. In May, the three companies signed a memorandum of understanding (MOU) to support the enhancement of Kyrgyzstan's financial infrastructure.

BCKG will be the sole specialized acquirer in the region, having obtained all the necessary core licenses from the local authorities and planning to establish a unified payment system.

Additionally, BCKG will handle various convenient payment methods such as QR codes and NFC, along with card transactions using BC Card's global payment solution "BAIS." Smartro's terminal and app payment technology will be used to expand customized payment environments for individual merchants.

BCKG will perform various tasks as a specialized acquirer, including merchant enlistment and management, transaction authorization, receipt acquisition and settlement. It will also offer online payment gateway services to adapt flexibly to the e-commerce environment.

The collaboration with BC Card is expected to enhance cross-border payment capabilities. Currently, BC Card is interconnected with major state-owned payment operators in Southeast Asia.

"BCKG will play a pivotal role in the payment innovation of Kyrgyzstan and contribute actively to digital financial innovation in neighboring Central Asian countries with similar cultures and environments," CEO of BC Card Choi Won-Seok said. "We will continue to actively contribute to digital financial innovation in Central Asia with world-class payment technology."

Write to So-Hyun Lee at y2eonlee@hankyung.com