Card Industry and Merchants Clash Over Card Fee Rates Intensifies

Korean Mart Association to Hold Press Conference Condemning Card Industry on the 28th

[Asia Economy Reporter Yu Je-hoon] Conflicts over card fee rates between the card industry and medium-to-large merchants are intensifying. As card companies initiate the triennial adjustment of merchant fees, the financial sector is paying close attention to whether conflicts between card companies and merchants will spread to other industries.

According to related industries on the 28th, the Korea Mart Association will hold a press conference this morning in front of the Government Seoul Office in Jongno-gu, Seoul, condemning the card industry for notifying fee increases. The Korea Mart Association is an organization composed of neighborhood marts and supermarkets.

Earlier, the Financial Services Commission, after analyzing the eligible costs of card fees at the end of last month, lowered the fee rates from 0.8?1.6% to 0.5?1.5% for 2.2 million preferred merchants with annual sales of 300 million KRW or less. For general merchants with sales exceeding 3 billion KRW, the fee rates are determined through negotiations between the card companies and each merchant.

The Mart Association pointed out in a pre-distributed statement, "Notices of substantial increases in card fee rates, up to the current maximum rate of 2.3%, are arriving one after another from card companies to general merchants who do not qualify for the preferred fee rates," adding, "This is a cunning calculation by card companies to compensate for the reduced profits from the lowered preferred fee rates by raising fees for general merchants."

According to the Mart Association, in the case of Shinhan Card, the notified fee rate averages 2.28% among 478 members, approaching the maximum rate (2.3%), with an average increase of 0.26 percentage points. Fee rates from other card companies averaged between 2.08% and 2.25%, with increases ranging from 0.02 to 0.10 percentage points.

The Mart Association warned, "We will begin terminating Shinhan Card merchant contracts, which first notified the highest increase rate, and will suspend all financial transactions related to Shinhan Card, including corporate cards and main bank transfers," adding, "This plan will expand from the Mart Association, a coalition of neighborhood marts, to all general merchant industries in the future."

The card industry is concerned about whether such conflicts over fee rate calculations will surface in other industries as well. It is known that the card industry has been negotiating with general merchants in various sectors such as automotive, aviation, telecommunications, and distribution ahead of the expiration of existing fee contracts but has not yet completed these negotiations. An industry insider said, "Negotiations are still not progressing well, but since it is before the presidential election, conflicts with merchants have not yet fully emerged," adding, "After the election, conflicts between merchants in other industries and card companies are likely to gradually surface."

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