By Kang Seung-woo
Staff Reporter
South Korea's credit card affiliates pay higher fees than other developed nations, the central bank said Thursday.
According to a Bank of Korea (BOK) report on fees charged by credit card firms in 13 countries Wednesday, Switzerland topped the list with 2.8 percent and South Korea was second highest at 2.2 percent.
The United States and Canada tied to round out the top three, both charging a 2 percent commission.
The rates for the rest of the group - Germany, Switzerland, Belgium, Denmark, France, Italy, the Netherlands, Spain, Britain, and Australia - were below 2 percent.
However, taking into account debit cards that are widely used in the other countries, Koreans are seen as paying the most.
In Switzerland, debit card usage accounts for 62 percent of all card payments and its commission rate is just 0.2 percent. On the other hand, commission rates on debit cards here are 1.9 percent despite their low popularity.
The BOK report also said that card companies encourage people to use credit cards, which causes inefficiency in the economy and results in non-card users making up for it.
During a briefing of the Financial Services Commission (FSC) at the end of last year, President Lee Myung-bak said that card firms charge excessive fees to small merchants. Since then, the government has pushed card companies to cut their rates.
The charges applied to about 900,000 small and medium affiliates have been lowered to 2.0 or 2.1 percent from 2.3 to 2.6 percent, which is nearly the same rate as those for big department stores (2.0 to 2.4), while approximate 86,000 shops in traditional markets pay at rates ranging from 1.6 to 1.8, 0.4 age points percent lower than before.
Through the markdown, the authorities expect that up to 100 billion won, which would have been spent on fees, will be spent on something else hopefully more worthwhile.