Shutdown of Face-to-Face Sales Due to COVID... Income Compensation for Card Recruiters (Comprehensive)

Card Recruiters Blocked from Face-to-Face Sales Due to COVID-19
Card Companies Have No Obligation to Compensate Income but Offer Relief Measures
100% Compensation Even if Only 80% Achieved, etc.

[Asia Economy Reporter Ki Ha-young] Choi Min-jung (55 years old, pseudonym), a recruiter for Card Company A, has recently seen her income cut by more than half due to the impact of the novel coronavirus disease (COVID-19). As a freelancer, Choi's income depends on recruitment commissions. However, with card recruitment sales becoming difficult amid COVID-19, her commissions have also been halved. She lamented, "I used to plan my spending based on the expected monthly income from card recruitment, but the impact 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 recruitment personnel were drastically reduced due to worsened business conditions such as merchant fee reductions, and now face a sharp decline in commissions 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 recruitment commission items if productivity reaches at least 80% of the previous level. 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.

Earlier, KB Kookmin Card decided to include card recruiters struggling financially due to COVID-19 in the special financial support program for small and medium-sized merchants with annual sales under 500 million KRW. Accordingly, they will provide payment deferrals and loan interest discounts.

The number of card recruiters at the seven specialized card companies reached 11,382 as of the end of last year. Card recruiters who attract new credit card customers operate as a kind of sole proprietors. Although they are exclusively affiliated with credit card companies, they are freelancers with almost no base salary and earn through recruitment commissions.

With people avoiding face-to-face contact due to COVID-19, card recruiters have been hit directly in their sales activities. Most conduct business in crowded places such as department stores, large supermarkets, and movie theaters. Since they have been unable to operate since last month, income decline is expected to accelerate starting this month. An industry insider said, "If recruiters cannot meet people, their income inevitably decreases accordingly," adding, "With face-to-face sales virtually impossible due to COVID-19, they are expressing difficulties in making a living."

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

Especially as the government recommends strong social distancing until the 5th of next month, face-to-face sales have effectively come to a shutdown. Card recruiters are focusing on online sales instead, but the number of new customers this month is reported to have sharply declined compared to the previous year.

An industry insider 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 confirmed one by one."

Meanwhile, the card industry has been offering various support measures for small business owners affected since the early days of COVID-19. Shinhan Card reduced the interest rate on business loans for small and medium merchants with annual sales under 500 million KRW by 30%. They are also implementing 2-3 months of interest-free installments and payment deferral. Samsung Card shortened the merchant payment cycle 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 deferrals, changes in card loan repayment conditions, and interest rate reductions. Additionally, to offer tailored support for local small business owners, they have signed agreements with local governments to provide big data consulting using regional card sales information.

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