Trade groups ready for boycott of Shinhan Card

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Trade groups ready for boycott of Shinhan Card

Several trade groups that represent self-employed businesses are poised to boycott major credit card firms later this month in a bid to have card transaction fees lowered.

The Federation of Professional Economic-Person Societies, an umbrella group representing some 250 smaller trade groups for the self-employed, said yesterday that it will ask its roughly 6 million to 7 million members to stop using Shinhan cards from Feb. 20.

According to the group, 1 million self-employed businesses are expected to participate in the boycott, including bars, dry cleaners, car repair shops, hair salons, private academies, realtors, jewelers, inns and other lodging businesses, karaoke establishments and Internet cafes.

The trade group began disseminating notices informing customers of the boycott for members to display at their respective businesses yesterday.

Should the boycott materialize, a considerable share of the 2.5 million locations that accept the credit and debit cards will begin rejecting them, much to the inconvenience of consumers.

“We are boycotting Shinhan Card because it has the largest number of customers and accepted locations in the country. But the issue [we are raising] is not limited to Shinhan Card,” said Oh Ho-seok, head of the trade group.

“Right now, different card transaction fees are being applied to different stores by an arbitrary classification of sectors,” he added, giving the example of one group of businesses defined by the phrase “prone to extravagance.”

“We want card companies to apply a flat transaction fee rate of 1.5 percent for all businesses, not just for chaebol-run department stores and golf courses,” Oh said.

Meanwhile, the Korea Federation of Retailer Organizations, another small business trade group, said it will ask its members to leave the transaction networks of Samsung Card, Hyundai Card and Lotte Card from next Wednesday.

However, credit card companies said they will not be able to implement any changes in their transaction fees until external analyses, which are ongoing, wrap up.

“We can only reach conclusions after the Credit Finance Association [a trade group for credit card firms and other lenders] finishes its review of how much change is viable in the transaction fee structure,” said Yoon Kyung-soo, a spokesperson for Shinhan Card.

According to Crefia, three research institutions have each been entrusted with analyzing how best to change the cards’ fee structure, including private think tank Korea Institute of Finance (KIF), state-run Korea Development Institute and consulting firm Samil PricewaterhouseCoopers. The earliest result by the KIF is expected around the end of February.

By Lee Jung-yoon []

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