It has emerged that card companies have been shoring up revenue by raising the fee rates for general merchants with annual sales of 3 billion won or more. As directed by financial authorities, card companies lowered the fee rates for small and midsize merchants with annual sales under 3 billion won, while raising the rates charged to general merchants. However, starting this year, as financial authorities also demand a freeze on fee rates for general merchants, concerns are expected to grow over a deterioration in profitability in the card industry.
According to data obtained on the 16th by lawmaker Yun Han-hong of the People Power Party from the Financial Supervisory Service, the fee rates charged by eight dedicated card companies (Samsung, Shinhan, Hyundai, KB Kookmin, Hana, Woori, BC, Lotte) to small and midsize merchants with annual sales under 3 billion won fell from 0.52–1.5% in 2022 to 0.42–1.46% in the first half of this year. In contrast, over the same period, the fee rates charged to general merchants with annual sales of 3 billion won or more rose from 1.97% to 1.99%.
Accordingly, dependence on fee revenue from large merchants is also increasing. In the first half of this year, of the 7.2 trillion won in fee revenue earned by the eight card companies, general merchants accounted for 86.3%. Small and midsize merchants accounted for only about 13%. On an annual basis, dependence on fees from general merchants rose by 0.3 percentage points, from 84.7% in 2022 to 85% in 2024, showing a recent upward trend. In effect, the revenue structure relies mostly on general merchant fees.
This is because financial authorities, citing inclusive finance, have repeatedly pressed card companies to keep lowering fee rates for small and midsize merchants. From the card companies' perspective, they had no choice but to raise fee rates for general merchants, which were not subject to cuts, to preserve revenue. However, as of February this year, at the request of financial authorities, fee rates for general merchants with annual sales of 3 billion to 100 billion won were also frozen, making even this form of preservation impossible.
The freeze on fee rates for general merchants could add pressure as card companies' revenue declines. According to the Financial Supervisory Service, the net profit of the eight card companies in the first half of this year totaled 1.2251 trillion won, down 18.3% from the first half of the previous year. During the same period, card merchant fee revenue also fell by more than 290 billion won year over year.
An industry official said, "We have no choice but to raise fees for relatively larger merchants to preserve revenue."