Toss (Viva Republica) is aggressively expanding its offline payment business and the terminal distribution, prompting a backlash from the Value-Added Network (VAN) agency industry. Toss decided to establish measures for mutual growth, including the expansion of the excellent agency system, to resolve conflicts with the agency industry.
According to the industry on the 29th, Toss held a meeting the day before with the Korea Credit Card Information Association (HanShinHyup), which is akin to a VAN agency association, to discuss measures for mutual growth with the industry. A representative point of the mutual growth plan Toss is preparing is the expansion of the excellent agency system. The excellent agency system is a framework for awarding agencies that have demonstrated outstanding performance in selling and providing services for Toss terminals. Discussions also covered support for program advancement and hardware devices related to agency operations.
A representative from Toss said, "VAN agencies are important partners for expanding the offline payment market," and noted, "We are consistently seeking various mutual growth measures to grow together in a changing environment, and we will continue to strive to establish ourselves as a trustworthy partner."
The association also said, "There are concerns that Toss's influence could expand across the entire VAN market, so we are discussing mutual growth measures."
On the 14th, HanShinHyup sent an official document to Toss Place and iShop Care, requesting that they "immediately cease aggressive business practices that disrupt the order of the payment market." Toss Place is a subsidiary of Toss that supplies payment terminals and payment solutions. iShop Care, a company specializing in terminal installation and maintenance, is a subsidiary of Toss Place, thus a grandchild company of Toss. Toss gives the manufacturing of payment terminals to Toss Place, while distribution and management to retail stores are conducted by VAN agencies like iShop Care.
The association claimed that iShop Care is providing card terminals worth 200,000 to 300,000 won to merchants for free or at a low price, effectively taking away business from small agencies. They described Toss's sales approach as "business practices that disrupt the order of the payment market." Concerns were also raised that Toss Place, through iShop Care, is effectively entering the VAN agency market and threatening the revenue base of small operators. The association conveyed the relevant content to the Korea Payment Value-Added Network Association (VAN Association) and requested the termination of VAN contracts with Toss if necessary.
The terminal is a core institutional sector that enables Toss, which has primarily focused on online simplified payments, to expand into offline payments. Accordingly, Toss is pursuing a strategy to distribute its own terminals to as many merchants as possible, one of which is a cost support promotion. Toss supports a portion of the device expense if a certain number of payments are made monthly at terminal merchants, effectively supplying them for free or at a very low price.
As a result, Toss Place, launched in 2023, surpassed 100,000 merchants and approximately 1.05 trillion won in transaction amounts in just about two years. The association claims that iShop Care has conducted business by receiving support from Toss to install terminals for free to expand its merchant base, causing harm to small agencies.
Toss explained that while it is conducting legitimate business activities, there are aspects where it has not fully grasped the demands of complex stakeholders, which is why it is preparing mutual growth measures.