Authorities induce self-employed to cut ‘pay fee’ … “It will not work” Skepticism

The Financial Supervisory Service (FSS) announced on the 19th that it had formed a task force to discuss ways to disclose payment fees for big tech companies such as Naver Pay and Kakao Pay. The photo shows a citizen paying with a credit card at a mart in Seoul. News 1

The financial authorities have decided to induce a cut in the pay fee, which is making the self-employed cry out to the self-employed with a higher payment fee than card companies. Simple payment operators, such as Naver Pay and Kakao Pay, which have established themselves as market powerhouses, are very nervous. However, there are also forecasts that the financial authorities cannot force simple payment providers to lower their pay fees, so it will only be ‘slightly cut’.

The Financial Supervisory Service (FSS) announced on the 19th that it had formed a task force with the goal of finalizing a ‘disclosure plan for payment fees such as Big Tech’ at the end of the year. The Financial Supervisory Service is planning to induce fee reductions by establishing a payment fee comparison system that simple payment providers apply to affiliated stores.

The Financial Supervisory Service (FSS) started to disclose fees in consideration of the criticism that pay fees, which are higher than card fees, increase the burden on the self-employed. During his presidential campaign, President Yoon Seok-yeol also proposed ‘relief of simple payment fees’ as a promise for small business owners.

The credit card fee paid by small business owners with current sales of 300 million won or less is 0.5% of the payment amount. On the other hand, the Naver Pay payment commission rate (based on order management affiliates) for the same self-employed person was 1.8%, significantly exceeding that of credit card companies.

The fact that the card industry is sensitive to the difference in fees directly related to revenue is also the background for promoting the disclosure of pay fees. Card companies have argued that Pay actually functions similar to a card, but is being discriminated against. Card fees, which are controlled by the government, have been falling all the time to ease the burden on the self-employed.

However, it is unclear whether the simple payment service provider will decide to reduce the fee that small business owners can feel through the disclosure of the pay fee. This is because, as there is no legal basis for the financial authorities to intervene in the pay fee, the simple payment service provider can only reduce it slightly. It is difficult to ignore the objection of the simple payment service provider that the pay fee is different from the card fee structure as it includes the service fee provided to the affiliated stores.

An official from the Financial Supervisory Service said, “We plan to promote the disclosure on a semi-annual basis in consideration of the fact that the fee structure with credit card companies is not the same while enhancing the transparency of the simple payment fee.”

Park Kyung-dam reporter

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