By Kang Seung-woo
Following a rally by local restaurant owners, the entertainment and luxury goods industries plan to rally against credit card companies, demanding commission cuts.
Amid growing pressure, including from politicians, credit card firms decided to cut fees charged to small retailers to 1.8 percent. In addition, the card industry expanded its definition of small- and medium-sized merchants from 120 million to 200 million won in annual sales.
However, entertainment establishments and jewelry shops were left off the list of beneficiaries and those industries, which expected to be included, are infuriated with the omission.
Businesses that will not enjoy the lower card fees include room salons, bars, nightclubs, karaoke bars and massage parlors as well as shops selling jewelry, antiques, artworks and sex toys.
Card issuers charge 4.5 percent commission to those businesses. Card fees for most other industries range from the mid-1 percent to mid-3 percent.
“Other than some doing business in certain areas including Gangnam, most owners are those who make their living by running small drinking establishments,” said the Korea Central Council of Nightspot Businesses (KCCNB).
“It does not make sense that we are left out of the revised commission cut plan.”
However, the card industry says that the entertainment and luxury goods industries have always been excepted from commission cuts and it defies Korean sensibilities to slash fees for such places.
An angry KCCNB plans to stage a rally on Nov. 20 to protest against the hefty card fees. The currently number of businesses in the KCCNB is around 25,000 involving some 600,000 people.
“We will continue protesting to cut card commissions. There will be about 100,000 people in the rally,” the organization said.
On Tuesday, a group of some 10,000 restaurant owners held the demonstration, while the ruling body of gas stations, the Korea Gas Station Association (KOSA), plans to hold a rally in front of the Gwacheon Government Complex, today, to add pressure on credit card firms to lower fees.
Meanwhile, credit card issuers have stood against the ruling party’s action to unify their commission rates on retailers regardless of industry and size.
Grand National Party leader Hong Joon-pyo proposed a bill Tuesday that would ban card firms from imposing different levels of commission and instead mandate an equal 1.5 percent charge, which angered card firms.