BC Card and Hyundai fail to agree on fee rate

Home > Business > Industry

print dictionary print

BC Card and Hyundai fail to agree on fee rate


BC Card users will not be allowed to use a finance company-backed monthly installment plan when purchasing a vehicle from Hyundai Motor, after the two failed to agree on Sunday on the rate of commission fees.

As their contract was up for renewal this year, Hyundai said BC Card should reduce the fees that it requires the automaker to pay when a customer buys a car and chooses to pay for it with an installment plan.

In the payment system, Hyundai Motor first pays a commission to the card company. Then the card company gives part of the commission to the consumer finance company from which some buyers get their loans. Consumers are then responsible for paying monthly installments. The system results in Hyundai customers paying a lower interest on their monthly installments.

The automaker asked that the fee rate be lowered from 1.9 percent of a customers’ total purchase to 1.3 percent, a request that BC Card denied on Sunday. BC refused to lower its rate below 1.5 percent, which is also the rate used by KB Card.

The meeting on Sunday between representatives from Hyundai Motor and BC Card was their final attempt to settle on a rate.

As a result of the failed discussion, BC Card users can no longer buy a Hyundai car on installments if their loan is from a consumer finance company rather than a bank.

Samsung and Shinhan will also be negotiating with the automaker over fees until March. Of all payment companies, Samsung has the highest number of users subscribed with the car installment plan.

In November, KB Card and Hyundai Motor agreed to set a fee rate of 1.5 percent, ending a seven-month disagreement.

The value owed on Hyundai vehicles in installment plans is 4.5 trillion won ($4.06 billion) in total.

BY PARK EUN-JEE [ejpark@joongang.co.kr]

More in Industry

[SHORTCUT] Is 2021 the year electric vehicles go mainstream?

Lobby groups call for leniency for Samsung's Lee

Thousands claim fraud after buying items via social media

No dial tone for 2G services on LG U+ starting in June

Ironing out an air corridor took decades

Log in to Twitter or Facebook account to connect
with the Korea JoongAng Daily
help-image Social comment?
lock icon

To write comments, please log in to one of the accounts.

Standards Board Policy (0/250자)

What’s Popular Now