Decline in Self-Employment... 3.05 Million Small Business Owners Receive Card Fee Reduction Benefits

Preferential Card Fee Rates for Small and Medium-Sized Merchants
to Be Applied Starting from the 14th

Empty stores line a commercial area densely packed with shops in Sinchon, Seoul. Photo by Jo Yong-jun

Approximately 3.05 million small business operators struggling with sluggish domestic demand will receive benefits from reduced card fees.

On the 13th, the Financial Services Commission announced that starting from the 14th, preferential card fee rates for small and medium-sized merchants will be applied in accordance with the card fee reform plan prepared in the second half of last year.

The number of small and medium-sized credit card merchants eligible for the preferential fee rates nationwide is 3,059,000, and the preferential fee rates will be lowered by 0.05 to 0.10 percentage points compared to before, depending on the sales bracket.

The Korea Financial Telecommunications & Clearings Institute sent notification letters to credit card merchants eligible for the preferential fee rates, and each merchant can also check the applicable fee rates through the Korea Financial Telecommunications & Clearings Institute, each card company’s call center, and the ‘Merchant Sales Transaction Information Integrated Inquiry System.’

Preferential fee rates will also be applied to 1,815,000 sub-merchants of payment gateway (PG) companies that collect card payments through PG companies, and 166,000 individual and corporate taxi operators who collect card payments through transportation settlement operators. Sub-merchants of PG companies and taxi operators can check the applicable fee rates through the payment gateway or transportation settlement operator they use.

For 165,000 merchants who opened as new credit card merchants in the second half of last year and were subject to general merchant fee rates but were later confirmed to fall under the small and medium-sized merchant category based on sales volume, the preferential fee rates will be applied retroactively. Each card company will refund the fee difference (previously paid fee minus preferential fee) to the card payment account of the respective merchants. The refund process is expected to be completed by the 31st of next month. The total refund amount for these 165,000 merchants is estimated to be about 60.6 billion KRW (approximately 370,000 KRW per merchant).

Merchants who opened as new credit card merchants in the second half of last year but closed during the same period are also eligible for refunds. Even if notification letters were not sent due to the absence of a current business location, eligibility and refund amounts can be checked from the 27th of next month through the Merchant Sales Transaction Information Integrated Inquiry System and each card company’s website.

Additionally, 131,000 sub-merchants of payment gateway companies and 5,048 individual and corporate taxi operators who opened as new merchants in the second half of last year and were subject to general merchant fee rates but were later confirmed to fall under the small and medium-sized merchant category based on sales volume will also have the preferential fee rates applied retroactively.

Furthermore, as part of a win-win cooperation effort to help self-employed individuals overcome difficulties, card companies have decided to maintain the existing fee rates for 116,000 general merchants with annual sales of 100 billion KRW or less for the next three years, even if factors such as increased eligible costs would otherwise lead to an increase in card fee rates.