"20,000 Won Communication Fee Support and Reduced Card Discounts?"... Card Industry Struggles to Find Solutions

Support of 20,000 KRW for Communication Fees
Late Partnership Discount Reduction Issue Arises
Discussion Ongoing in Council but Not Easy... Government Support Needed

[Image source=Yonhap News]

[Asia Economy Reporter Ki Ha-young] The card industry is struggling belatedly over the government's 20,000 won support for communication fees. Problems such as a decrease in card company partnership discount amounts due to the communication fee support have emerged. The industry is trying to find solutions as much as possible, but insists that support from the government and the telecommunications industry is urgently needed.

According to the industry on the 26th, regarding the 20,000 won communication fee support as part of the second disaster relief fund, it was confirmed that the Ministry of Science and ICT, telecommunications, and card industries formed a consultative body at the end of last month to discuss the issue of communication fee card discounts.

The communication fee support was implemented by automatically deducting 20,000 won from the September communication fees for citizens aged 16-34 and those aged 65 and over. It was expected that the telecommunications industry would simply receive government funds and provide the support, but the fallout affected the card industry due to the complex structure of bundled products and partnership discounts.

For example, a customer using a 25,000 won monthly plan who met a 300,000 won previous month spending requirement through card partnership discounts and received a 15,000 won communication fee discount would see their card discount reduced to 5,000 won due to the government's 20,000 won communication fee support. This is because the communication fee itself was billed as 5,000 won after the 20,000 won support. The benefit, which was previously 15,000 won, was reduced to 5,000 won, rendering the effort to meet the previous month’s spending requirement ineffective. At the comprehensive National Assembly audit of the Ministry of Science and ICT held on the 22nd, Rep. Heo Eun-ah of the People Power Party pointed out this issue, criticizing that "card companies received unexpected unfair profits and had to bear compensation costs to return them, while telecommunications companies faced misunderstandings that they were enriching themselves despite selecting support targets and providing discounts." In response, Minister Choi Ki-young of the Ministry of Science and ICT replied, "It will take time to resolve the issue due to card company program development."

Card Industry Cooperates as Much as Possible... Government and Telecom Industry Support Needed

The card industry states that it will cooperate as much as possible to compensate for the communication fee card discount benefits. However, it is not easy to find a practical way to compensate for these benefits. Since the formation of the consultative body, the card industry has been meeting frequently to seek solutions, but no immediate effective measures have emerged.

It is explained that implementing a system to identify discount recipients based on certain criteria is very complicated. Each card company has various forms of partnership discounts such as installment and billing discounts, resulting in countless cases. Card companies only receive information after the communication fee has already been discounted, making it difficult to identify recipients. Furthermore, even if they compensate for the discount benefits, there is no basis to support this. It is awkward to compensate for amounts already billed in the following month. They also complain that applying payment methods such as point issuance or additional discounts by selecting recipients through the system is not easy.

Because of this, there are also criticisms that if discussions had been held together before the September communication fee deduction, it would have been easier to solve the problem. There are limitations in responding after the September communication fee billing has been completed.

An industry official said, "We will cooperate as much as possible, but due to the variety of cases and the difficulty of developing the system, there will be cases we cannot handle," adding, "Support from the Ministry of Science and ICT and telecommunications companies is urgently needed starting from basic issues such as confirming discount compensation recipients."