By Lee Hyo-sik
Tens of thousands of bars, “hagwon (private learning institutes)” and other small businesses nationwide will close their doors on Nov. 30 to protest what they claim are high credit card transaction fees.
According to the Federation of Professional Economic-Person Societies and other advocacy groups for small shop owners Tuesday, about 50,000 operators of entertainment establishments, private learning institutes, massage parlors, opticians and other businesses run by the self-employed will gather and hold a rally at the Janchung Gymnasium in Seoul at the end of this month.
Those who do not take part in the mass gathering are expected to at least pull down their shutters for one day in protest of the high fees charged by card companies.
The organizers also plan to hold more large-scale protests in cities across the country, including Busan, Daegu, Daejeon and Gwangju, from December through February next year.
If the Nov. 30 rally materializes, it will be the first time for self-run businesses in 60 sectors employing more than 5 million workers to collectively shut down.
“We have reached a point where we simply cannot pay excessive credit card fees amid sluggish business conditions. It’s not right for card firms to charge lower merchant fees on conglomerate-owned department stores and gas stations, while collecting much higher commissions from small shop owners,” said an official at the Federation of Professional Economic-Person Societies.
The organization was established in 1998 to advocate the interests of the self-employed in 60 categories.
The official said card companies collect 2.6 to 4.5 percent of sales as transaction fees from small businesses, arguing they should lower the fees to 1.5 percent on par with department stores and gas stations.
“In particular, bars and other small-scale entertainment-related businesses pay much higher fees, worsening their bottom line,” he said.
But firms have refused to further lower their rates, saying it will hit their profit margin hard.
“Card companies were recently forced to cut the rates to 1.8 percent due to political pressure. From a business point of view, we should have not cut the fees. Lowering the rates further down to 1.5 percent is like telling us to stop doing business,” an executive at a local card issuer said.
The news of another massive protest against the high fees comes three weeks after more than 50,000 restaurant owners held an unprecedented, large-scale rally at the main Olympic Stadium in eastern Seoul.
The owners demanded the government take action to cut the commission they have to pay for every card transaction they carry out.
Several days later, 15,000 members of the Korea Gas Station Association held their own rally in front of the Gwacheon Government Complex to add more pressure on card firms to slash fees.
Yielding to growing public pressure, credit card companies made a wave of announcements that they will lower the commission for small-l and medium-sized affiliates earning less than 200 million won per year, to the level imposed on larger retailers.
They said the rate charged to merchants will come down from over 2 percent to 1.8 percent early next year.