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 [firstname.lastname@example.org]
with the Korea JoongAng Daily
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