[Fact Check] Did Naver and Kakao Charge Small Business Owners High Fees?

[Asia Economy Reporter Bu Aeri] Allegations that Naver and Kakao are charging high-interest fees from small business owners are being raised mainly in political circles.

Political Circles Criticize "High Fees of Naver and Kakao Pay"

No Woong-rae, Member of the Democratic Party of Korea

No Woong-rae, Supreme Council Member of the Democratic Party of Korea, criticized at the Supreme Council meeting held at the National Assembly on the 25th, saying, "The damage and suffering of small business owners from the novel coronavirus infection (COVID-19) are increasing," and added, "There are large corporations that collect fees at high interest rates instead of sharing the difficulties. They are Naver and Kakao."

No mentioned that the preferential fee rate for small and medium-sized credit card merchants by the Financial Services Commission is 0.8~1.6%, and said, "The big tech merchant fee rates such as Naver Pay and Kakao Pay are very high."

He continued, "In the case of Naver Pay, the account transfer method is 1.65%, and the card-based payment method is about 2.2~3.08% depending on sales," pointing out, "There is a difference of more than 1% compared to credit card fee rates." Previously, Yoon Chang-hyun, a member of the People Power Party, also criticized the same issue.

Naver and Kakao: "Difference in Fee Structure"

In response, Naver and Kakao argued that it is difficult to compare with credit card company fees because operating costs and card company fees are included.

According to Naver Financial, Naver Pay merchants are divided into several types such as ▲Smart Store ▲Order-type Pay ▲Payment-type Pay.

Among these, Smart Store and Order-type Pay provide 'sales tools' such as order receipt/management, shipping, exchange, and returns, unlike the simple payment agency model of general payment gateway (PG) companies.

A Naver Financial official explained, "Since various functions such as delivery tracking, inquiries, member management, and reviews are provided, it is difficult to make a direct comparison regarding fees."

Also, in the case of Payment-type Pay, which only performs simple payment agency services, the average payment fee is 2.3%. The official added, "Basically, simple payment services pay the basic payment fee of 2% to card companies on behalf of merchants because they handle payments to card companies."

According to Naver Financial, even for Payment-type Pay, a reduced fee rate of about 1.0~1.5% is applied to small businesses. This also includes the card fee rate of 0.8% for small businesses.

Kakao Pay holds a similar position.

Kakao Pay explained, "The fees Kakao Pay charges merchants for card payments online include mainly card company fees, PG fees, and Kakao Pay's system operating costs," adding, "About 80% of the total fees are costs paid to card companies, so as the use of simple payments increases, the card companies' profits also increase."

When paying with Kakao Pay Money, which is a cash payment, bank firm banking fees occur each time charging happens, and the company states that the fees are currently at a level similar to card companies. A Kakao Pay official rebutted, "Even this was fully supported free of charge from March to June for merchants struggling due to COVID-19, regardless of affiliated brand, industry, or store sales scale."