Neighborhood marts followed by PG companies' backlash... Card industry struggles with fee negotiations

"Damage Will Ultimately Be Passed on to Consumers"

[Asia Economy Reporter Yu Je-hoon] The card industry is struggling with negotiations over general merchant fee rates returning after three years. Following small and medium-sized neighborhood marts, the electronic payment gateway (PG) industry, a representative of online shopping malls, has also opposed the card companies' proposed fee rate increases.

According to the financial sector on the 15th, the Electronic Payment Gateway Association (PG Association) held a rally against the card fee increase in front of Shinhan Card headquarters in Jung-gu, Seoul, that morning. The PG Association consists of eight companies including Nice Payments Co., Ltd., Danal Co., Ltd., NHN Korea Cyber Payment Co., Ltd., KSNET Co., Ltd., KG Mobilians Co., Ltd., KG Inicis Co., Ltd., Toss Payments Co., Ltd., and Korea Information & Communications Co., Ltd. They plan to continue the rally for three days starting from that day.

According to the PG Association, the seven major card companies previously notified the PG companies that they would raise the merchant fee rate by 0.05 to 0.1 percentage points. As a result, the card fee rates for PG companies will increase to 2.25 to 2.30%. The PG Association sent an official letter to the card companies demanding the disclosure of cost data, which is the basis for calculating merchant fees, stating that they cannot accept the increase. They intend to verify whether the qualified costs were reasonably calculated.

Regarding this, the PG Association pointed out, "The card companies' increase in PG merchant fees is intended to recover losses from the reduction of fees for small and medium-sized merchants through PG companies," adding, "If PG merchant fees increase, the card fees for online shopping malls using PG companies' credit card services will also increase, which will ultimately lead to higher sales prices and cause harm to consumers." They further stated, "We will consider terminating merchant contracts with card companies that are uncooperative in future negotiations."

It is not only the PG industry that is in conflict with card companies during the general merchant fee rate negotiations. The Korea Mart Association, centered on medium-sized neighborhood marts, is also conducting a boycott campaign against Shinhan Card, the industry leader, refusing to accept the card companies' fee increase proposals.

The card industry, while denying the claim that losses from the reduction of fees for small and medium-sized merchants are compensated by PG companies and other general merchants, expressed its intention to strive for a smooth negotiation settlement. A card industry official said, "The fee rates notified to PG companies were determined based on qualified costs recalculated according to the Specialized Credit Finance Business Act," adding, "We are making efforts for a smooth negotiation."

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