The South Korean government has withdrawn a plan to cap the fees credit card issuers can charge small and midsize retailers, according to an official from the Credit Finance Association of Korea.
Lawmakers had earlier considered limiting interchange rates under a revision of the country's Credit-Specialized Financial Business Law.
"However, the bill that was passed last week did not contain these provisions," the official said.
The country's Financial Services Commission had earlier asked South Korean card companies, including Samsung Card Co. and Shinhan Card Co., to lower their maximum interchange rates to 2.4% to 2.5% of annual revenue at small shops. "Since the credit card companies voluntarily decided recently to lower fees to these levels from the existing 2.3% to 3.6%, the provision was no longer necessary," the official said.
The card companies also decided to lower interchange rates at midsize retailers to 1.6% to 1.9%, in line with the rates paid by the biggest merchants, from the previous 2% to 2.2%, the official said. The new rates are expected to take effect this month.
The association was established in 1998. The trade group represents five credit card companies, 17 leasing companies, 16 installment-financing companies and four venture capital companies.
