About 1 million stores participate in protest to demand reduction of service chargesA million retailers nationwide are set to boycott payment via Shinhan Card from Feb. 20.
Their protest against the nation’s largest credit card firm is due to the card industry’s lukewarm attitude toward cutting settlement service charges on retailers.
Members of the retailer association notified consumers on Monday that they will not accept Shinhan Card for payment of goods.
The retailers reportedly demanded cutting the service fee rate to 1.5 percent of the payment, from the current level of 2.3 percent charged by the card firm.
If Shinhan Card does not slash the service fees to a certain level (about a 0.8 percentage point slash), their joint action will begin in two weeks, according to the retailers.
The association is composed of around 60 retail sectors, such as private educational institutes, real estate brokers, automobile repair shops, motels and a variety of entertainment service providers.
Since the fourth quarter of 2011 when the “corporate greed” of financial companies received harsh criticism, the retailer association has continued to call for the credit card issuer to cut the service fees.
Though Shinhan had promised to cut the fees, the company slashed the rate for a certain number of retailers by setting up its own standards.
The number of holders of Shinhan Card products reaches about 20 million and the number of membership stores, which accept the cards for consumers’ payment, comes to 2.5 million.
Shinhan Card captures more than 20 percent of the market and accounted for a large portion of Shinhan Financial Group’s earnings over the past few years.
Its No. 1 position in the card industry has yet to be challenged since Shinhan Financial acquired the formerly largest issuer, LG Card, following the 2003 credit card fiasco.
Another association has already threatened to boycott three other major players ― Samsung Card, Hyundai Card and Lotte Card ― from Feb. 15.
Last year, tens of thousands of restaurant owners gathered in Olympic Stadium in southeastern Seoul for a much-publicized rally, demanding the rates be slashed further to 1.5 percent. Major politicians from the country’s two main political parties and key candidates in the Seoul mayoral by-election attended in a show of support.
Credit card companies earn nearly half of their total income in commissions from member merchants. This year, they are expected to rake in a combined net profit of 2 trillion won, the highest on record.
By Kim Yon-se (
kys@heraldcorp.com)
