Start of Sangsaeng Consumption Support Fund Payment... Cashback Excluded from Performance via Simple Payment Must Be Returned in November (Comprehensive)

Start of Cashback Payment for Sangsaeng Consumption Support Fund
Performance of Indirect Payments via Simple Payment
Settlement at Once on the 15th of Next Month... Consumer Confusion Inevitable

[Image source=Yonhap News]

[Asia Economy Reporter Ki Ha-young] As the cashback payment for the Win-Win Consumption Support Fund began on the 15th, the government decided to exclude card usage amounts paid through simple payment methods at non-qualifying sectors from the performance calculation when issuing cashback next month. Although this is a last-minute measure prepared due to fairness issues causing controversy, consumer confusion is expected to be inevitable.

According to the government and industry sources, card usage amounts paid via simple payment methods such as Naver Pay and Kakao Pay at non-qualifying sectors like large supermarkets and department stores will be excluded from the performance calculation when issuing the November cashback on the 15th of next month. The cashback for October, which starts being paid from today, will include such simple payment performances and will be settled in one go next month. Each card company plans to notify customers via text messages when paying the October cashback. The notice will be along the lines of: "Cashback for Naver and Kakao exclusive shopping malls and simple payment usage in some non-qualifying sectors for the Win-Win Consumption Support Fund, as well as additional adjustments, may be settled through additional payments or recoveries after next month."

Accordingly, consumer confusion is expected to be unavoidable when the cashback is paid on the 15th of next month. Even if consumers receive cashback this month, if the performance from simple payment bypass payments is excluded, the cashback amount may decrease, or in the worst case, they may have to return the entire cashback already received.

Unified Settlement on the 15th of Next Month... In Worst Case, Refund Claims

The Win-Win Consumption Support Fund is a policy that returns 10% of the excess amount spent over 3% compared to the average monthly card usage in Q2 (April to June) of this year, up to a maximum of 200,000 KRW, in cash-equivalent card points for credit and debit card usage during October and November.

To revitalize the local economy, large supermarkets, department stores, and large online malls were excluded from qualifying sectors. However, controversy arose as purchases made with Naver Pay at stores like Emart Mall and Homeplus, which are listed on Naver, were recognized as qualifying for the Win-Win Consumption Support Fund. The same applies to luxury goods purchased through Kakao Gift.

Even when purchasing the same seller’s product at the same price, whether cashback performance applies varies depending on the payment method, raising fairness issues. There were also criticisms that this goes against the original purpose of introducing the Win-Win Consumption Support Fund.

Due to the payment structure, card companies had no way to distinguish detailed merchants within simple payments, causing the card industry to struggle to find a solution. Eventually, by sharing merchant information with Naver and Kakao, a method to exclude non-qualifying performances was found, but time was tight. An industry official expressed concern, saying, "When the November cashback is paid on the 15th of next month, the cashback amount will inevitably be adjusted. Consumers unaware of this may feel confused by the suddenly reduced cashback amount."

Meanwhile, according to the Ministry of Economy and Finance, last month’s card cashback payment amounted to 387.5 billion KRW, expected to be paid to 8.1 million people, averaging about 48,000 KRW per person. Within just one month of implementation, 55.4% of the total budget of 700 billion KRW was consumed. Shinhan, Hana, Hyundai, and NH Nonghyup cards were paid at midnight, Samsung at 7 a.m., KB Kookmin at 9 a.m., BC and Woori at 10 a.m., and Lotte Card from 3 p.m.

So far, 15.09 million people have applied to participate in the Win-Win Consumption Support Fund. The scheduled cashback payment amount for November has already exceeded 50 billion KRW. From the 1st to the 12th of this month, a total of 51 billion KRW in cashback has been generated, which is scheduled to be paid on the 15th of next month.