Credit card fees cut for new businesses in 2019

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Credit card fees cut for new businesses in 2019

Stores that opened in the first half of the year will receive refunds on their credit card commissions, the Financial Services Commission (FSC) said Monday.

The FSC said this refund is the first of its kind, the main goal being to ease the burden on small businesses just starting off.

Normally, new businesses are charged relatively high rates, as they do not have a track record on earnings.

In order to get the prime rate on their credit card charges, small private stores had to have less than 300 million won ($253,000) in annual sales. SMEs had to generate less than 3 billion won in sales.

The FSC said new businesses were charged 2.2 percent. The prime rates are between 0.8 percent and 1.6 percent.

But the regulator said starting this year new stores will be eligible for the preferential rate. For example, if a new store that opened in January made 50 million won in credit card transactions in the first half, a 0.8 percent prime rate will be applied, leading to a 700,000 won refund.

The FSC estimates 227,000 stores, 98.3 percent of the 231,000 that opened in the first six months, will receive refunds. It added that roughly 56.8 billion won of refunds will be made.

The average refund for each store will around 250,000 won.

The financial authority said credit card companies will be wiring refunds to the stores by Sept. 10 and 11.

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