As the financial authorities plan to reduce next year's credit card commission rate by 0.1 percentage points, the credit card union is responding with threats of a general strike.
According to the financial sector on the 18th, the Credit Card Workers' Union Council, consisting of seven credit card companies (Shinhan, KB Kookmin, Hyundai, Lotte, Woori, Hana, and BC Card), plans to hold a press conference as early as the 19th to clarify its stance on credit card merchant commission rates and eligible costs.
The union is expected to demand a halt to the reduction of credit card commissions and the abolition of the eligible cost reassessment system. It is known that the union is considering large-scale protests and a general strike to enforce its demands. Previously, the union held a rally at the Seoul Government Complex in Jongno-gu, Seoul, in September and stated that it would go on a general strike if necessary.
Earlier, the Financial Services Commission decided to lower the credit card commission rate for merchants with annual sales of 300 million won or less from the existing 0.5% to 0.4%. As a result, approximately 3,046,000 small and medium-sized merchants will receive an average reduction of 8.7% in commissions.
Since the introduction of a favorable commission rate system for small business owners through the revision of the Specialized Credit Finance Business Act in 2012, the Financial Services Commission has reassessed eligible costs every three years and determined the preferential commission rates for small and micro merchants. Consequently, the commission rate, which ranged from 1.5% to 2.12% in 2012, has steadily decreased to between 0.4% and 1.45%.
The credit card industry sees no further room to reduce credit card commissions. It states that as the commission rates have consistently decreased, profitability has worsened, causing the revenue from credit sales, its main business, to drop to around 0.5%. Credit card companies have been maintaining their revenues through expanded lending.