Card Recruiters Facing Business Difficulties Due to COVID-19 Will Receive Income Compensation

Due to COVID-19 Impact, In-Person Sales Impossible
Card Companies Reviewing Income Compensation Measures

[Asia Economy Reporter Ki Ha-young] Choi Min-jung (55 years old, pseudonym), a recruiter for Card Company A, has seen her income cut by more than half recently due to the impact of the novel coronavirus disease (COVID-19). As a freelancer, Choi receives recruitment commissions. However, with card recruitment sales becoming difficult due to COVID-19, her commissions have also been halved. She lamented, "I used to plan my expenses based on the expected monthly income from card recruitment, but the blow is indescribable," adding, "I don't even know how long I can hold on."

A measure to partially compensate the income of card recruiters struggling to make a living due to COVID-19 is being implemented. As the number of recruiters was drastically reduced due to worsened business conditions such as merchant fee reductions, and now commissions have sharply decreased due to COVID-19, card companies have taken preemptive action.

According to the financial sector on the 24th, Card Company B plans to introduce a system this month that compensates 100% of certain recruiter commission items even if only 80% of the previous productivity is achieved. Card Company C plans to broadly recognize the scope of new members recruited by recruiters to reduce income losses. All seven specialized card companies (Shinhan, Samsung, KB Kookmin, Hyundai, Lotte, Woori, and Hana Card) are reviewing support measures for card recruiters, so support plans are expected to be finalized one after another.

The number of card recruiters at the seven specialized card companies reached 11,382 as of the end of last year. Card recruiters who engage in sales to attract new credit card customers are a type of sole proprietor. Although they are exclusively affiliated with credit card companies, they are freelancers, so they have almost no base salary and receive recruitment commissions.

Due to COVID-19, as people avoid face-to-face contact, card recruiters operating in multi-use facilities such as department stores, large marts, and movie theaters have been directly hit in their sales activities. Since they have been unable to operate since February, income reduction is expected to accelerate from this month. In particular, with the government recommending strong social distancing until the 5th of next month, face-to-face sales have effectively come to a shutdown. Although recruiters are focusing on online sales instead of face-to-face sales, the number of new customers this month is reported to have sharply declined compared to the previous year.

In fact, as people reduce outdoor activities, sales at department stores and large marts have decreased. According to the 'Recent Economic Trends (Green Book) March issue' released by the Ministry of Economy and Finance, department store sales last month plummeted by 30.6% compared to the previous year. Sales at discount stores such as large marts also decreased by 19.6% year-on-year.

An industry official said, "Most card companies are reviewing various measures related to income compensation for card recruiters who have become financially distressed due to COVID-19," adding, "As the payday for card recruiters approaches this month, support measures will be finalized one after another."

Meanwhile, the card industry has been offering various support measures for small business owners affected since the early stages of COVID-19. Shinhan Card reduced the interest rate on business loans for small and medium merchants with annual sales under 500 million won by 30%. It is also implementing 2-3 months of interest-free installments and deferral of payment claims. Samsung Card has shortened the payment cycle for merchants by one day, offers up to six months of payment deferral, and provides 2-6 months of interest-free installments for all industries. KB Kookmin, Hyundai, Lotte, Woori, Hana, and BC Card also provide payment deferral and changes to card loan repayment conditions and interest rate reductions.

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