Credit card firms plan to lower transactions fees by 0.2 percent in a reluctant response to merchants decrying the “unfair” fees.

The plan to cut transaction fees is part of a broader reform to woo merchants after complaints led the financial regulator to consider allowing businesses to reject credit card transactions of less than $10,000 won ($8.55). The industry is also mulling including 200,000 more small businesses into the lower fee category.

“We are increasingly pressured by small businesses and politicians to stash transaction fees we impose on credit card payments,” an industry official said.

“The cut will vary across credit card companies but the consensus is being forged on a 0.2 percent cut,” he said. Small businesses currently pay 2 percent to 2.1 percent of the proceeds from sales of their goods and services to credit card companies in interchange fees. It is between 1.6 percent and 1.8 percent for merchants in traditional markets.

Members of the Korea Restaurant Association, an industry group of restaurant owners, have been staging large scale rallies at the main Olympic Stadium in Jamsil, eastern Seoul, closing their businesses for the hour. The group has been arguing that they have been shouldering losses due to the high fees when customers settle small-denomination transactions with credit cards.

While the regulator had considered allowing businesses to reject credit cards for small payments, the idea of banning small payments in credit card raised concerns that it could dampen spending when the economy desperately needs domestic consumption.

Financial Services Commission chief Kim Seok-dong on Thursday said no such right to refuse micro payment will be introduced.

By Cynthia J. Kim (cynthiak@heraldcorp.com)