The Financial Supervisory Commission is under fire for its plan to allow small retailers and merchants to refuse credit card payments for small-value transactions under 10,000 won.

The commission’s plan is intended to address the long-running resentment of small, self-employed shop owners toward credit card companies. These small-business people have been complaining about the high rate of fees credit card issuers charge them for card transactions. They argue that due to the high fees, they are forced to incur losses when customers settle small-denomination transactions with credit cards.

Currently, these small retailers pay 2.7 percent of the proceeds from sales of their goods and services to credit card companies in interchange fees. This rate is much higher than the 1.5 percent charged for shops in department stores and other larger credit card merchants.

The commission’s answer to the problem is to have consumers pay in cash for low-value transactions under 10,000 won. As of July, the total volume of such small-amount credit card transactions reached 1 trillion won. If these transactions are settled in cash, the commission says, it would relieve operators of small-scale shops of the burden to pay credit card fees.

The commission’s plan, however, completely ignores the convenience of consumers. If the scheme goes into effect, consumers will have to carry cash to pay for taxi fares and everyday purchases. Most of the people who will experience inconveniences are students and ordinary people.

The scheme will also undermine the government’s strenuous push thus far to expand the use of credit cards as part of its efforts to enhance transparency and fairness in taxation. The steady increase in credit card payments has helped prevent people from hiding or underreporting their taxable incomes. If the FSC allows small merchants to refuse credit cards to address their complaints, it could be a case of burning one’s house to get rid of the bedbugs.

The problem basically stems from the excessively high rate of fees credit card companies charge petty shop owners. Hence the commission should see whether there is room for lowering the rate to the level applied to large credit card merchants.

Data shows that credit card companies earned 2.7 trillion won in net profits last year, up 46.1 percent from the previous year. Some 60 percent of the profits came from merchant fees. This suggests the need to adjust the rate of fees for small merchants.