South Korean Antitrust Regulator Said To Be Probing Bank Service Fees

South Korea’s antitrust watchdog reportedly has launched a probe into whether banks and card networks manipulated the service fees they charge their customers, local newspaper the Korea Herald reported Nov. 20.

The Fair Trade Commission is investigating 17 local banks and more than 13 credit card networks to determine whether they conspired to fix prices to ease competition, according to the Korea Herald, a local newspaper.

If found guilty, the card companies and banks face fines of several hundred billion won, the report said. Converted, 100 billion won equates to about US$87.5 million or $64.8 million euros.

The authority declined PaymentsSource requests for comment, saying it does not comment on any investigations it maybe carrying out.

The move may be indicative of the Korean government’s push to get card companies to slash their fees, according to the Korea Herald, which says the investigation would include credit card applications, loans, funds transfers, deposits and withdrawals where the fees applied are similar across companies. 

The probe comes not long after protests from small merchants against credit card companies forced them to cut interchange rates (see story). Among the first networks to reduce its rates was Shinhan Card Co. Ltd., which says it will lower the interchange rate to 1.6 to 1.8% of the sale from 2% for acquirers of small merchants accepting its branded cards effective Jan. 1

What do you think about this? Send us your feedback. Click Here.