Small businesses threaten to boycott Lotte cards

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Small businesses threaten to boycott Lotte cards

Groups of small businesses have vowed to stop accepting Lotte cards from next month in protest against the high transaction fees being levied on mom-and-pop stores.

The move came after Lotte said it would charge Vic Market, a membership-based discount store operated by Lotte Group, fees of around 1.5 percent when it opens later this month in southwestern Seoul.

This is another round of action taken by small businesses in a bid to lower transaction fees charged by credit card firms.

The groups of small businesses including motels, restaurants and entertainment businesses sent an official letter yesterday to Lotte Card saying they will boycott the company’s cards beginning next month.

“Now there is a nationwide move to raise transaction fees on large retailers in an effort to narrow the differences in the rates paid by large and small businesses, but Lotte Card is going backwards,” they said. “We’re not just refusing to use its credit cards, but will also boycott Lotte Mart discount stores.”

They said they plan to hold demonstrations in front of Lotte Mart in Songpa District, southeastern Seoul, today and distribute leaflets asking the public to participate in their protest. The groups have 1 million small businesses as members.

A Lotte Mart discount store in Geumcheon District, southwestern Seoul, will reopen as a Vic Mart membership-based store on June 28.

Lotte Card said the transaction fees for Vic Market will be higher than 1.5 percent, adding that no advantage would be granted to large retailers.

“We are in talks over the rate and it is going to be fixed at between 1.5 percent and 1.7 percent,” a Lotte Card official said. “The country’s financial authority recommended that an unreasonably low rate not be applied for large retailers, so we will decide an appropriate level.”

This is the third time the groups are using credit card usage as a bargaining tool after they threatened to boycott Samsung and Shinhan cards early this year. Samsung and Shinhan avoided the boycott by agreeing to cut their rates.

By Limb Jae-un []

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