Pressure to Lower Card Fees Becomes Real... Presidential Office "Negotiations Starting This Fall"

President Yoon Suk-yeol is visiting Yeongcheon Market in Seodaemun-gu, Seoul, on the afternoon of the 10th, inspecting a vegetable store. [Image source=Yonhap News]

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Recently, President Yoon Suk-yeol, who visited a traditional market, issued instructions to resolve the issue of high fees associated with Onnuri gift certificates. Accordingly, the government has set a plan to conclude negotiations on lowering card company fees by the end of this year. Pressure from the government for additional fee reductions on card companies is expected to materialize.

On the 21st, a presidential office official told Asia Economy in a phone interview, "Negotiations on card fees are scheduled to begin this fall," adding, "The Ministry of SMEs and Startups is preparing the rationale for the negotiations, and plans to cooperate with the Financial Services Commission."

Earlier, on the 10th, during a visit to Yeongcheon Market in Dongnimmun, Seodaemun-gu, Seoul, President Yoon was told by a store owner that "the fees for Onnuri gift certificates are high, making it difficult to sell products at low prices," and he instructed Chief Secretary for Economic Affairs Park Chun-seop, who accompanied him, to devise countermeasures.

The Onnuri gift certificates mentioned by the store owner are rechargeable card-type certificates. Consumers charge the gift certificate amount through an app and use it via card payment methods. Since the private card companies' networks are used, a certain percentage of fees must be paid. No separate fees are charged on the Onnuri gift certificates themselves.

Card fee rates are recalculated every three years based on the qualified cost calculation system, and this year marks the third year. A presidential office official explained, "Since the president received this suggestion during a price inspection visit, it is not something that will be left unattended." The presidential office is organizing a cross-ministerial task force on living expenses and prices after the general election to prepare structural price stabilization measures.

However, voices from the card industry indicate that additional fee reductions are difficult, so resistance is expected. Opinions also differ on how effective further fee cuts would be in stabilizing prices, given that card company merchant fee rates have already dropped to around 0.5?1.5%.

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