Samsung Card’s e-mail angers its merchants
Samsung Card gives Costco a preferential commission rate of 0.7 percent on transactions, compared to the 1.6 to 1.8 percent rate paid by small merchants. The small merchants say that’s not fair.
Responding to their complaints, Samsung Card on Friday sent an e-mail to the Federation of Professional Economic-Person Societies (FPS), which has over two million small business members, saying it had met with Costco officials.
According to Samsung Card, Costco said the demand violated local fair trade regulation and the newly activated Korea-U.S. free trade agreement, which could lead to an international trade dispute.
When contacted, Costco said it never made any reference to any free trade agreement in the meeting.
On Monday, Samsung Card sent the FPS a revised e-mail with no mention of the FTA and a new line saying that Costco insisted the demand for a change in the contract was a matter of great concern with no international precedent.
Samsung Card said the first email was sent without fact checking and apologized to its merchants.
The merchants are threatening to stop accepting Samsung Cards from their customers starting April 1.
Samsung Card’s misstep was made just two days after Samsung Group Chairman Lee Kun-hee was reported to be furious at his executives at Samsung Electronics, which was fined by the Fair Trade Commission after employees and security guards interfered in a government investigation a year ago.
At the end of last year, Samsung Card held an 11 percent market share, trailing closely behind Hyundai Card with 12 percent, in the credit card industry apart from banks that issue cards, such as Shinhan Card and KB Card.
By Lee Ho-jeong [email@example.com]
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