Good afternoon folks!
Followed by the first post ‘[Credit Card Talk#1] Enforcement Rules of the Specialized Credit Financial Business Act (https://financialservicescommission.wordpress.com/2012/09/17/credit-card-1-enforcement-rules-of-the-specialized-credit-financial-business-act/)’, I am bringing up the second one today. I guess you might have grasped a big picture of the Act which will be enacted at the end of this year.
Before a complete enactment of the Act, pre-reforming process is going on in advance. This is to reflect concerned voices of small merchants who have been disadvantaged in paying higher credit card merchant fees compared to large retailers. The problem was that those large retailers paid less merchant fees to credit card companies by using their bargaining power and strong market positions. Hence, even within the same sector, there were varying degrees of merchant fees between small merchants and large retailers. For some worst cases, small merchants paid about 30 percent of their total revenue for credit card merchant fees.
During the recent meeting held by Korea Federation of Small and Medium Business, small merchants urged that “there should not be any discriminatory treatment in merchant fee system”. Those concerned voices are reflected in the latest reform! The reform took its effect as of 1st of September for the purpose of promoting better livelihoods of small merchants as well as easing their economic difficulties.
This reform is expected to ease the previous complaints by the small merchants who were unfairly treated, and the reform will contribute to those small businesses’ better performances. Once the Act is effective as of this December, ‘the list of preferential treatment’ will be updated biannually (in January and July) to cover more small merchants. Also, if a small merchant entitled to be given the preferential treatment is excluded from the list, the merchant can report it to the service center and apply for the preferential treatment!