Card Companies Cannot Provide Benefits Exceeding 0.5% of Usage Amount to Corporate Members

[Asia Economy Reporter Kim Jin-ho] Starting from July, credit card companies must limit the scope of economic benefits provided to corporate clients such as large corporations to within 0.5% of the usage amount.

The Financial Services Commission announced on the 12th that it held a regular meeting and approved the "Amendment to the Specialized Credit Finance Business Supervision Regulations" based on this content.

According to the amendment, card companies have specified the economic benefits that can be provided to corporate members. The total profit from card usage must exceed total costs, and the benefits must be limited to within 0.5% of the corporate card usage amount.

Total profit consists of annual fees and merchant fees (approximately 1.8% on average) from corporate members' card usage. Total costs include expenses for recruiting corporate members, card issuance costs, and costs incurred from credit card usage. Economic benefits are calculated to include everything provided by the card company to corporate members, such as additional services, fund contributions, and cashback.

However, for small businesses only, the limit of 0.5% of usage amount does not apply, and only the criterion that total profit exceeds total costs must be met. Small businesses are defined as those with an average annual sales of 12 billion KRW or less for manufacturing, etc., and 1 billion KRW or less for restaurants, etc.

A Financial Services Commission official explained, "It is expected that excessive economic benefits provided by credit card companies to large corporations and other large legal entities will decrease," and added, "It is also expected to have a positive effect on lowering merchant fees in the future."

Meanwhile, the Financial Services Commission will announce the approved Specialized Credit Finance Business Supervision Regulations on its website and apply them in accordance with the enforcement date of the Specialized Credit Finance Business Act Enforcement Decree (July 1).

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