Go Seung-beom "Card Fee Negotiations Underway... Announcement Before Year-End" (Comprehensive)

Meeting with Financial Industry on 17th
Card Companies Review MyPayment Business
Capital Companies Also Consider Allowing Insurance Agencies and Real Estate Leasing

[Asia Economy Reporter Ki Ha-young] Ko Seung-beom, Chairman of the Financial Services Commission, stated regarding the recalculation of card merchant fees, "We are in the process of discussing the detailed aspects and will announce the results by the end of the year."

On the 17th, Chairman Ko made this remark in response to questions about the results of the card merchant fee recalculation during the first meeting with the credit specialized finance industry held at the Credit Finance Association in Jung-gu, Seoul.

Card fee rates are recalculated every three years following the amendment of the Specialized Credit Finance Business Act in 2012. The rates are determined by reviewing eligible costs calculated based on cost analysis, including card companies' funding costs, risk management costs, general administrative expenses, VAN fees, and marketing expenses. The fee rates set this year apply from 2022 to 2024. The Card Company Labor Union Council opposes further reductions in card fee rates and argues for the abolition of the eligible cost recalculation system.

Regarding the eligible cost recalculation system, Chairman Ko said, "The eligible cost recalculation system is stipulated by law, and today we received various opinions, including suggestions to extend the recalculation cycle," adding, "(Since the system is legally mandated) it is difficult to change easily, and reviewing this requires comprehensive consideration of opinions not only from card companies but also from merchants and consumers."

During the meeting, discussions were held on allowing card companies to engage in payment instruction transmission services (MyPayment) and permitting capital companies to enter the insurance agency business. The Financial Services Commission aims to support card companies to become comprehensive payment service providers and lifestyle-oriented financial platforms, and to rationally improve regulations to leverage the characteristics of the credit finance industry.

Accordingly, various supports will accompany the development of card companies into comprehensive payment service providers. First, MyPayment, which will be introduced with the amendment of the Electronic Financial Transactions Act, will be allowed for card companies. MyPayment refers to a business model where the operator does not hold consumers' funds but can access consumer accounts to instruct payments and transfers. Allowing MyPayment for card companies will enable transfer services such as payments and remittances using only consumer account information without separately holding payment funds.

Additionally, the scope of data utilization will be expanded, and accumulated data will be used to pioneer new business areas. Along with personal credit information management services (MyData), credit evaluation for individual business owners, big data analysis, processing, sales, and consulting services, ancillary and concurrent businesses will also be further expanded.

Chairman Ko also promised active support for card and capital companies to become lifestyle-oriented financial platforms. He stated, "We will support the creation of personalized financial demand by utilizing MyPayment and MyData," and added, "We will explore ways to expand platform business areas, including investment and entry into e-commerce and live commerce, and, on the premise of establishing safeguards against concerns such as tied selling, we will also consider permitting capital companies participating in the MyData business to enter the insurance agency business."

Furthermore, institutional support necessary for capital companies to expand into the real estate leasing sector related to the 4th industrial revolution and environmental industry development will also be reviewed.

Chairman Ko said, "Since the credit finance industry is closely connected to the daily lives of the public, innovations in the credit finance industry will be directly felt by the people, so further innovation efforts by credit finance companies are required," and added, "We plan to hold communication opportunities with market participants whenever possible to concretize plans for the development of the financial industry."

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