SEOUL, Oct. 19 (Yonhap) -- South Korean credit card companies on Wednesday voiced strong opposition to the ruling party's move to unify their commission rates on retailers of different industries and sizes.
On Tuesday, Grand National Party leader Hong Joon-pyo tabled a bill that would ban card firms from imposing different levels of commission and instead mandate an equal 1.5 percent charge.
The bill came one day after local card firms announced plans to cut fees to below 1.8 percent for retailers whose annual sales stand below 200 million won (US$175,039). A 2.32 percent fee is charged to retailers with sales exceeding 200 million won.
Despite the move, retailers have been demanding companies further reduce the commission rate to 1.5 percent, staging a rally on Tuesday in which 70,000 restaurant owners took part.
Industry officials raised doubts on the GNP bill, arguing an unified commission policy would shift their net profit to negative territory.
"All credit card companies would have to close down if they apply a 1.5 percent commission regardless of retailer sizes and industries," said a market watcher.
"Such a movement cannot happen in a free capital market. Since companies announced a reduction plan on Monday, at least one year should be granted to see how it goes," said another official.
Credit card firms earned 7.2 trillion won last year on commission income, but they argue less than 1 trillion won is left after management expenses.
