(Yonhap Editorial) Reach a reasonable compromise on retailers' commission to credit card firms

SEOUL, Oct. 10 (Yonhap) -- The government is considering allowing retail shops and other small- and medium-sized service businesses to refuse credit card payments for small transactions. The Financial Services Commission (FSC) plans to make comprehensive measures to improve the structure of credit card transactions, including allowing retailers to refuse credit cards for small transactions, by the end of this year. The limit on the small sum payments may be set at 10,000 won (US$8.55) based on practices in the United States and Canada that set $10 as the lowest limit.
Under present law, retailers who refuse to accept credit cards are subject to imprisonment of up to one year or fined up to 10 million won regardless of the amount of the transaction.
Retailers are crying out over the high commission fees that credit card companies charge. Business owners are demanding that the obligation of taking credit cards should be abolished. The small shops insist the big credit card companies have raised commission fees sharply to compensate for their business losses.
The government's move to allow retailers to refuse small transactions by credit card payment is regarded as acknowledgment of the commission burden for small- and medium-sized merchants to some extent.
However, the government's plan may cause ripples, increasing inconvenience for consumers. Credit card payments for transactions less than 10,000 won have increased sharply and now number more than 1 billion per year.
The credit card payments for small amounts have become part of everyday life, and refusal of cards for payment run counter to credit society.
The essential reason behind the dispute over the small credit card payments is the high commission fees. Therefore, it would be more desirable to adjust the commissions for small- and medium-sized retailers to reasonable rates, rather than allow them to refuse the small transactions.
Some big credit companies reportedly reaped huge profits amounting to more than 1 trillion won last year. So it is true that the credit card companies enjoy great superiority over small dealers.
It is also doubtful that the commission rates have been reasonably calculated for different categories of businesses. For instance, the proprietors of restaurants have to pay 2.7 percent of their credit card sales as commission while golf course operators, classified as being in a luxury business, need to pay just 1.5 percent of their credit card sales.
The government should examine the fairness of different credit card commission fees among various businesses and adjust the rates reasonably.