Check Base Amount and Cumulative Usage When Designating 'Main Card' for Consumer Support Fund

Government-Card Company System Setup Preparation
Excluding Usage Amounts at Golf Courses and Arcades
System Expected to Be Available Early Next Month
August Spending Calculated, Payment in September

On the 29th of last month, two days before the implementation of the new social distancing reform plan, citizens were seen passing by on the streets of Myeongdong, Seoul. Photo by Hyunmin Kim kimhyun81@

[Sejong=Asia Economy Reporter Moon Chaeseok] The government has begun an internal review to establish a payment system for the Win-Win Consumption Support Fund in the form of card cashback, included in the second supplementary budget (supplementary budget). The plan is to build a system where citizens can immediately check the reference amount (average monthly usage in the second quarter) needed to calculate the cashback amount and the real-time accumulated usage amount when they designate their 'main card.'

System to Check 'How Much More to Spend to Receive Cashback' to be Established

According to the Ministry of Economy and Finance on the 4th, the government plans to prepare the Win-Win Consumption Support Fund payment system in consultation with card companies and activate it as soon as the supplementary budget is approved by the National Assembly. If the supplementary budget is approved within this month, the system prepared by the government will be available from early next month. Cashback amount calculation will start from August consumption, and payments are expected to begin in September.

The consumption support fund is a policy that returns 10% of the amount spent exceeding a 3% increase compared to the average monthly card usage in the second quarter. For example, if the average monthly usage in the second quarter is 1 million KRW and 1.53 million KRW is spent in August, 10% of the additional 500,000 KRW exceeding 3%, which is 50,000 KRW, will be returned in September. This means that to receive the benefit, one must accurately know the reference amount, the average monthly usage in the second quarter, and confirm whether they are spending more than this after August.

The government plans to build a system that provides information necessary for cashback benefits, such as the reference amount (average monthly usage in the second quarter) and the monthly accumulated usage after August. First, if an individual designates one main card among multiple credit and debit cards they hold (excluding corporate cards), the card company will collect usage information held by other card companies, calculate the reference amount, and notify the individual. When the card is used after August, the monthly accumulated amount of consumption eligible for cashback will also be immediately notified to the individual.

The government plans to build a system where related information can be checked via card company websites or links sent through text messages.

Usage at Department Stores, Large Mart, Online Malls, and Entertainment Venues Excluded from Benefits

The government has decided to restrict card usage locations when calculating the cashback reference amount and usage amount so that benefits for consumption activation go more to small business owners than large corporations, and more to semi-durable and non-durable goods than durable goods.

Specifically, even if cards are used at department stores, large marts, online shopping malls, luxury specialty stores, and entertainment venues, cashback benefits will not be granted. Large electronics retailers, golf courses, karaoke rooms, arcades, lottery shops, adult goods stores, precious metals businesses, the four major insurance premiums, and automatic transfers for transportation and communication fees are also excluded from cashback consumption calculation. Car purchase expenses are also excluded from the calculation of reference and usage amounts.

However, purchases of home appliances and furniture are expected to be included in the calculation of reference and usage amounts depending on the purchase location. If purchased at department stores or large marts, the amount will be excluded from calculation, but if purchased at small-scale stores, it will be included.

The criteria for the use of the 250,000 KRW national support fund, which will be uniformly paid to 80% of the population through this supplementary budget, are also likely to be applied the same as the consumption support fund. Regarding concerns that 'tricks' such as concentrating consumption on one family member's card or strategically adjusting the timing of large-scale consumption like tuition payments may arise, the government has stated that it will not sanction 'concentration' or 'early spending.'

Cashback will be provided in the form of points. Points received as cashback are expected to have no restrictions on where they can be used.

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