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The burden of small and mid-sized retailers will be eased as the Financial Supervisory Service has instructed credit card companies to slash their transaction service fees.
Over the past few years, some 1 million retailers continued to demand credit card issuers to cut the service charge for consumers’ payments for goods with their credit cards.
After talks between the regulator FSS and the credit card industry, about 2 million retailers will see service fees lowered to a level deemed more reasonable.
The biggest beneficiaries of the more are retailers in the dry cleaning industry, as 1.19 million of the 1.2 million laundry services nationwide will see a cut in card settlement charges.
More than 98 percent of 64,000 cosmetics stores will see cuts, along with 97.4 percent of 74,000 beauty parlors and 95.2 percent of 120,000 clothing shops, according to the FSS.
Among the beneficiaries are more than 80 percent of 495,000 restaurants and 73.1 percent of 44,000 hospitals.
Earlier this year, 1 million retailers nationwide boycotted payment via Shinhan Card and Samsung Card.
Their protest against the major credit card firms was due to the card industry’s lukewarm attitude toward cutting settlement service charges on retailers.
The retailers demanded cutting the service fee rate to 1.5 percent of the payment, from the current level of 2.3 percent charged by Shinhan Card, the nation’s largest issuer.
They also demanded that Samsung Card, the nation’s third-largest credit card issuer, cut settlement service charges on retailers and cease offering exclusive benefits to discount chain Costco Wholesale Korea.
Samsung was the main target of retailers’ protests as it was charging Costco’s Korean unit a service fee of only 0.7 percent, while the rate on most small retailers charged by the issuer has hovered above 2 percent over the past few years.
“Major credit card firms have been criticized for applying favorable settlement service fees to only large retail chains, while charging a regular fee for smaller players,” an FSS official said.
By Kim Yon-se (kys@heraldcorp.com)
Over the past few years, some 1 million retailers continued to demand credit card issuers to cut the service charge for consumers’ payments for goods with their credit cards.
After talks between the regulator FSS and the credit card industry, about 2 million retailers will see service fees lowered to a level deemed more reasonable.
The biggest beneficiaries of the more are retailers in the dry cleaning industry, as 1.19 million of the 1.2 million laundry services nationwide will see a cut in card settlement charges.
More than 98 percent of 64,000 cosmetics stores will see cuts, along with 97.4 percent of 74,000 beauty parlors and 95.2 percent of 120,000 clothing shops, according to the FSS.
Among the beneficiaries are more than 80 percent of 495,000 restaurants and 73.1 percent of 44,000 hospitals.
Earlier this year, 1 million retailers nationwide boycotted payment via Shinhan Card and Samsung Card.
Their protest against the major credit card firms was due to the card industry’s lukewarm attitude toward cutting settlement service charges on retailers.
The retailers demanded cutting the service fee rate to 1.5 percent of the payment, from the current level of 2.3 percent charged by Shinhan Card, the nation’s largest issuer.
They also demanded that Samsung Card, the nation’s third-largest credit card issuer, cut settlement service charges on retailers and cease offering exclusive benefits to discount chain Costco Wholesale Korea.
Samsung was the main target of retailers’ protests as it was charging Costco’s Korean unit a service fee of only 0.7 percent, while the rate on most small retailers charged by the issuer has hovered above 2 percent over the past few years.
“Major credit card firms have been criticized for applying favorable settlement service fees to only large retail chains, while charging a regular fee for smaller players,” an FSS official said.
By Kim Yon-se (kys@heraldcorp.com)
