Amid Party-Government Dispute... Credit Card Cashback TF 'Stuck in Place'

Discussion on the Continuation of Card Cashback Policy
Currently in a Temporary Pause Due to Uncertainty
Some Say "Implementation This Year Seems Difficult"

Hong Nam-ki, Deputy Prime Minister for Economic Affairs, is checking documents before giving a proposal explanation related to the 2nd supplementary budget at the Planning and Finance Committee plenary session held at the National Assembly on the 13th. Photo by Yoon Dong-joo doso7@

[Asia Economy Reporter Ki Ha-young] As the government and the ruling party clash over the scope and scale of disaster relief payments, the task force (TF) operating to provide the Win-Win Consumption Support Fund (credit card cashback) is also at a loss.

According to the industry on the 14th, the TF, which includes the government, the Korea Credit Finance Association, and credit card companies, established to build the credit card cashback payment system, is currently on pause. Although several meetings were held after the kickoff meeting, further discussions have become difficult due to significant disagreements between the ruling party and the government regarding disaster relief payments.

On the previous day, the Democratic Party of Korea decided to push forward with a party resolution to expand the disaster relief payment target from the bottom 80% income bracket to 100%, effectively implementing a "nationwide disaster relief payment," and decided to scrap the credit card cashback policy. However, Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, maintained his stance that disaster relief payments should be given to the bottom 80% income bracket and that the credit card cashback policy is still necessary.

With the survival of the credit card cashback policy in question, there are forecasts that the TF assembled to build the credit card cashback payment system will find it difficult to continue operating. The card industry explained that since this is a government-led initiative, they are preparing without disruption while monitoring the passage of the supplementary budget bill, but the general assessment in the market is that proceeding with the project as planned will not be easy.

A financial sector official said, "The ruling party and government have failed to narrow the gap over disaster relief payments in the supplementary budget, making discussions on promoting credit card cashback itself difficult," adding, "With the recent rapid spread of COVID-19, it is uncertain when consumption stimulus measures like credit card cashback can be implemented."

Some expect that the credit card cashback policy will be difficult to implement this year. This is due to the unpredictable timeline for the COVID-19 pandemic to subside and numerous criticisms regarding the effectiveness of the credit card cashback policy from the outset. For example, online platforms and large marts were excluded from cashback refund targets.

Another financial sector official said, "From the early discussions of the credit card cashback policy, there were criticisms such as, 'Who would spend 1 million won just to receive 100,000 won cashback,' even though the policy aimed to stimulate consumption among higher-income groups," adding, "The plan was to resolve these issues through discussions and implement the policy without a concrete roadmap, but there is not enough time to supplement and implement it within this year."

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