I Want No Hesitation When Using My Card


Good afternoon, guys! I was surprised that it is already the time to celebrate cherry blossom festivals in April.  As time flies so fast like a rocket, we always get to know something new every day and it is quite hard for me to keep up with all of them(sigh). Well, though, in the middle of the new things, I managed to find a great one which can make small shop owners and even us, buyers, happy. It is regarding VAN commission fee which is very close to our daily purchase habits. And I believe some of you guys already have been told about it before.


First of all, I want you guys to fully understand the concept of VAN commission fee. What does this V.A.N mean actually? Speaking in short, it is the abbreviation of Value Added Network and it is where every transaction with credit cards is occurring. As you know there are so many credit card providers in the status quo. And if it were not for VAN companies, a terrible situation would happen that a shop owner has all the card machines of every provider. You guessed it? Yes, it is the role of a VAN company to integrate all the transaction ways of every card corporation and make it a lot easier and simpler. So credit card providers need to pay commission fees for the convenience to these VAN companies and it is said that the fee costs about 90 – 150 won for each transaction. It  is definition of the VAN commission fee.

While the number of payment with credit cards has been soaring and we tend to use credit cards more and more in daily transaction, the VAN companies have not shown any trials to lower the fee although it is very expensive. It is said that over 50% of card transactions in 2012 were costing lower than 20,000 won. The problem is the commission fee that the card providers have to pay to VAN companies exceeds the amount of money they receive from card users. It is like card providers get 50 won from a swipe but pay 100 won back to the VAN companies. In economic nature, the rest of 50 won contributes to the price increase of a product.

So FSC has activated a task force to stabilize the VAN commission fee and the card transaction market. Solutions that the task force is researching are ‘Discrimination of the fee regarding the price of a product’, ‘Registration of VAN companies to FSC’, ‘No unjust rebate custom by giant corporations’ and else. The former is to lower the fee and stabilize the market, and the others are to keep the card market clean from the underground economy. This is in fact the last step of FSC’s card commission fee amendment project. We expect that many small/medium shop runners get some practical merits such as fee deduction through this plan. It appears that the result will show up in around July or August of this year. Well, as it is applied to the market, the burden of the fee might weigh less than before.

I am waiting for someday when I don’t hesitate to use my credit card even though the price is only 1,000 won. Still, there are too many vendors who reject to being paid in credit cards just because it is too cheap to be swiped. And I know it is because of the commission fee. I believe that the struggle of FSC results in the day I am dreaming of. OK! This is the end of my article, and I hope you guys have great weekdays! Thanx a lot!

By Kicheol Lee (summfrea@hanmail.net)


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