Card firm workers delay strike

Union workers from card firms hold a protest rally against the strengthened regulation to cut card transaction fee in Yeouido, Seoul in March. Korea Time file

By Lee Kyung-min

A coalition of union workers at card firms decided to delay a strike, Friday, on condition the government revises the recently strengthened regulations to cut card transaction fees.

The collective move reflects their prevalent fear about sudden layoffs or pay cuts, an inevitable course of action following a reduction in revenue triggered by the lowered fee.

Representatives of union workers at the country's six card issuers said a walk-out of greater scale will be in order in late May unless the Financial Services Commission (FSC) accepts their demand.

“The FSC has run a special task force set up to deliberate on 15 specific revision requests we made over the past four months. However, three key demands have all been rejected by the financial authorities,” the workers said at a press conference in Seoul.

They have called for putting a limit on how much the fee can be lowered for “large” partner stores with 50 billion won ($43 million) in annual sales.

Another demand was to allow their firm to leverage up to 12.5 times their asset size, from the current limit capped six times.

The limit set for other capital firms are up to 10 times their asset size.

The workers also called for a prompt cancellation of various “perks” given to card holders, especially services that continue to incur up to tens of billions of won in net losses.

The announcement is the latest development of the brewing conflict among card firms, their workers and partner firms as well as the financial authorities.

The friction began in January when a new measure by the FSC took effect.

It lowered transaction fees for small- and medium-sized enterprises (SMEs) and the self-employed following their repeated claims that the fee was a major factor straining their already-deteriorating bottom lines.

However, the policy in favor of “the weak” ended up backfiring as card firms charged higher fees to “larger” businesses to offset the sudden losses.

Such firms including major retailers, mobile carriers, hotels and franchisers blasted the move saying the policy was unfairly forcing them to bear the amount previously paid by their SME counterparts.

Card firms say the measure is inevitable to avoid loss, adding they are left with limited options other than to gradually reduce their workforce mostly involving those on the lower end of the corporate scale such as irregular card sales workers.

Card firms say they are cornered by decreasing earnings, with their net income in the first three months of 2019 having dropped 37 percent compared to a year earlier.