A group of civic organizations on Monday requested the prosecution to investigate alleged rebate provision by companies that handle credit card transactions to large retailers that accept credit cards.

Because the value-added network companies pay rebates to large retailers, it is becoming difficult to cut credit card commissions for self-employed merchants, the civic groups said.

The civic organizations called for a prosecutorial probe into 13 VAN firms as well as 18 credit card acceptors including Lotte Data Communication, E-Mart, Nonghyup Hanaro Mart, Ministop, Hyundai Oilbank, S-Oil, Hi-Mart, Starbucks and Homeplus over alleged violation of antitrust and fair trade rules.

It is the first time civic groups requested a prosecutorial inquiry of VAN companies and companies that accept credit cards.

The groups accused the VAN companies of paying more than half of the commission they receive from credit card firms to large retailers as rebates to keep doing business with them in a bid to earn more commission and attain a dominant position in the industry.

Such irregular practices leave only self-employed merchants paying high commission to credit card companies, they argued.

The National Assembly in March passed a revised law that bans credit card firms from imposing discriminatory commission rates and large conglomerates from abusing their dominant status.

Once the prosecution begins the probe, the civic groups plan to stage protests demanding transparent transactions between the VAN firms and credit card acceptors as well as improvement of related rules by financial authorities.

By Kim So-hyun (sophie@heraldcorp.com)