Save Small Businesses... Card Companies Increasing Support Amid COVID-19 Spread (Comprehensive)

Considering Income Compensation Measures for Card Recruiters and Others

[Asia Economy Reporter Ki Ha-young] As the novel coronavirus infection (COVID-19) spreads, credit card companies are also expanding support for small business owners who have been affected.

According to the industry on the 4th, KB Kookmin Card has included credit card solicitors and automobile installment finance salespeople who are struggling to make a living due to COVID-19 in the special financial support targets for small and medium-sized merchants with annual sales of 500 million won or less. Accordingly, they plan to support payment deferrals and loan interest rate discounts.

Credit card solicitors who attract new credit card customers are a type of sole proprietor. Although they are exclusively contracted with credit card companies, they are freelancers, so they do not receive a base salary but earn recruitment commissions. As people avoid face-to-face contact due to COVID-19, credit card solicitors operating in multi-use facilities such as amusement parks, large marts, and department stores inevitably face damage to their business.

Accordingly, credit card companies are reviewing measures to partially compensate the income of credit card solicitors on a company-by-company basis. Major measures under consideration include changes to the commission system, such as increasing recruitment commissions. An industry official said, "Each company has a different and complex commission system, so it is not an issue that can be easily decided," adding, "Various measures are being reviewed regarding income compensation for credit card solicitors."

Shinhan Card has proposed additional support measures for small and medium-sized enterprises and small business owners struggling due to COVID-19. Shinhan Card plans to open a dedicated section for small and medium-sized enterprises and small business owner products on its shopping mall, All That Shopping, on the 6th. Through promotions such as drastic discounts and My Shinhan Points accumulation, they aim to activate sales of small business owner products.

Earlier, credit card companies presented support measures from the early stages of the COVID-19 outbreak. Shinhan Card reduced the interest rate on business loans for small and medium-sized merchants with annual sales of 500 million won or less by 30%, implemented 2-3 months of interest-free installments, and deferred payment claims. Samsung Card shortened the payment cycle for merchants by one day, provided up to six months of payment claim deferral, and offered 2-6 months of interest-free installments for all industries. KB Kookmin, Hyundai, Lotte, Woori, Hana, and BC Cards also provide payment claim deferrals, changes in card loan repayment conditions, and interest rate reductions.

According to the COVID-19 related financial support status announced by the Financial Services Commission on the 28th of last month, credit card companies supported approximately 9.1 billion won (1,059 cases) through interest-free installments and payment deferrals for small and medium-sized merchants over 14 business days from the 2nd to the 26th of last month. This includes 7.72 billion won (955 cases) in interest and delinquency fee discounts and 1.41 billion won (104 cases) in payment claim deferrals.

In the future, credit card companies plan to provide big data consulting using regional card sales information through agreements with local governments. The goal is to enable customized support for local small business owners.

An industry official said, "All credit card companies have presented support measures for small merchants and small business owners affected from the early stages of COVID-19," adding, "As COVID-19 spreads, support measures are being expanded."

This content was produced with the assistance of AI translation services.