"High commission rates" criticized... Naver Financial says "Difficult to make direct comparisons"

Kwon Chil-seung, Democratic Party Lawmaker
"Urgent Need for Institutional Reform of Unregulated PG Companies"

[Asia Economy Reporter Ki Ha-young] As contactless payments increase, there have been criticisms that the commission rates of Naver Pay and Baedal Minjok services are high. In response, Naver Financial argued that the commission includes fees payable to card companies and costs for additional services, making direct comparisons difficult.

On the 1st, according to the electronic payment gateway (PG) electronic financial payment status submitted by the Financial Supervisory Service to Kwon Chil-seung, a member of the Democratic Party of Korea (Hwaseong Byeong), the commission income of the top 10 companies increased annually, amounting to 2.097 trillion KRW in 2018, 2.483 trillion KRW in 2019, and 1.545 trillion KRW in the first half of 2020. The average commission rate was confirmed to be 2.2%, exceeding the card companies' fees. PG companies refer to firms that act as payment agents allowing sellers to make internet electronic payments without directly signing merchant contracts with card companies during e-commerce transactions.

In particular, Naver Financial and Woowa Brothers had the highest commission rate among PG companies at 2.8%. The commissions collected by these companies over the past three years amounted to 1.121 trillion KRW for Naver Financial and 363 billion KRW for Woowa Brothers.

Rep. Kwon stated, "Although PG companies are supervised by the Financial Supervisory Service under the Electronic Financial Transactions Act, protection measures for merchants and small sellers regarding standard terms, commissions, and settlement of sales amounts are insufficient," and pointed out, "Institutional improvements for PG companies outside regulation are urgently needed."

In response, Naver Financial explained, "The commission includes payment fees payable to card companies and costs for additional services not provided by other PG companies, so it cannot be judged solely by the figures that we have made huge profits." Since PG companies act as intermediaries for merchants to make payments to card companies, they charge basic payment fees to card companies, making it difficult for the average commission rate to be lower than the card companies' fees.

Regarding the criticism of high commission rates, they also rebutted, "In the case of Smart Store and Order-type Pay, various functions such as order reception, shipping, exchanges, member management, and point accumulation are provided, so direct comparison is difficult," and added, "For payment-type Pay, which only handles payment agency, the average commission rate is only 2.3%, and reduced commission rates are applied to small self-employed businesses."

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