With Phase 3 of the Nara Love Card getting under way, Shinhan Bank, Hana Bank and IBK Industrial Bank of Korea, selected as operators, have begun competing to win over service members.

The Phase 3 programme has started and issuance has begun in earnest at local military manpower offices nationwide, the financial sector said on Thursday. The Nara Love Card is a financial product issued to conscripts upon enlistment and covers everything from receiving military pay to everyday payments.

Banks are focusing on the market for a clear reason. If they secure service members in their early and mid-20s as customers, the chances are high they will remain a primary bank after discharge. It is seen as a starting line that effectively determines lifelong customers.

The core of the Phase 3 competition is the practicality of benefits. Benefits such as cinema discounts included in the existing Nara Love Card have disappeared, with the focus shifting to areas with high actual usage frequency such as OTT services, delivery apps, convenience stores and public transport. Even for the same benefit category, differences among banks are clear in discount rates, spending requirements and limits.

Differences are seen starting with benefits at military stores (PX), an essential spending destination for service members. Shinhan Bank offers a 20 percent discount every day regardless of payment amount, and set a monthly limit of up to 30,000 won to reflect the characteristics of service members who make many small and repeat payments.

Hana Bank set no performance requirements for PX discounts and offers discounts of up to 30 percent, highlighting accessibility. IBK chose a strategy to widen discounts, allowing discounts of up to 50 percent through a special PX discount. Shinhan Bank is cited as strong in small-amount, felt benefits, while IBK is cited as strong in discount intensity.

In everyday spending benefits, Hana Bank’s strategy is more clearly seen. Hana Bank analysed service members’ living environment and spending patterns and concentrated benefits in frequently used areas such as PX, online shopping, delivery apps and CU convenience stores. It applies 20 percent cashback each to online shopping and delivery apps and offers on-site discounts of up to 30 percent at CU convenience stores.

Another feature is that it broadly includes discounts and cashback not only for dining brands, PC rooms, cafes, lodging apps and other services often used during overnight stays or leave, but also for self-development and leisure areas such as language tests, bookstores and amusement parks. It is viewed as a structure that considers life during military service and after discharge rather than simply expanding discount items.

Shinhan Bank chose a strategy of widening the overall range of benefits, including convenience stores, public transport, telecoms, delivery, mobility and OTT services, rather than raising discount rates in specific areas. IBK is building a platform-friendly spending structure by linking discounts on telecoms, convenience stores, transport and dining with Naver Plus Membership benefits.

Differentiation continues in support for travel costs and digital consumption. Hana Bank provides cashback of up to 20 percent not only for public transport such as buses and subways but also for taxis and regional transport. It also applies discounts or cashback to digital life areas such as mobile phone bills, OTT services, mobile music and subscription services, reflecting the trend of increased content consumption after military life.

Strategies also diverge in financial benefits. Shinhan Bank and Hana Bank offer an annual interest rate of 2.0 percent for salary transfers and when salaries are received. Hana Bank did not set an amount limit. For the Jangbyeong Naeil Junbi Jeokgeum military savings product, Shinhan Bank offers up to 10 percent a year, while Hana Bank and IBK are slightly ahead at up to 10.2 percent a year.

Insurance benefits differ in the size of coverage. Shinhan Bank set the coverage limit for free accident insurance at up to 500 million won, and IBK expanded it to 530 million won. Hana Bank raised coverage limits for accidental death and permanent disability to up to 860 million won, presenting the most aggressive coverage structure. It also included handset damage insurance to broadly cover risk factors that may occur during military service.

Competition is also intense in digital and marketing. IBK is working with Naver Pay to provide Npay point accrual benefits on payments and is also considering the digital transformation of defence and military manpower administration in the future. It selected the singer All Day Project as an advertising model to strengthen a youthful image.

Shinhan Bank appointed ITZY’s Yuna as its model and moved to target men in their teens and 20s, with YouTube ad views surpassing 6 million. Hana Bank also joined the brand awareness competition by putting IVE’s An Yujin front and centre. An Yujin drew attention again when she said on the fan communication platform Bubble, "I heard there would be a Yujin card from Hana Bank, so I said 'I want one too, how can I get it?' and they told me I was not eligible for issuance."

A banking industry official said, "The Nara Love Card is not just a debit card but a starting point for securing long-term customers," and added, "The competition over benefits will become even fiercer going forward."