Controversial law may pass National Assembly ahead of April elections
Credit card firms are considering filing a petition with the Constitutional Court to ban lawmakers from providing the government with the right to lower the services fees on card payments.
A revision of the Credit Finance Business Act allows the government to set the rates of credit card service fees charged on retailers.
Ahead of the April 11 general elections, the bill has been pushed by a dominant number of ruling and opposition lawmakers.
The bill, which passed the National Policy Committee earlier this month, also won approval from the Legislation and Judiciary Committee on Monday.
The credit card industry is striving to prevent the bill from passing the plenary session of the National Assembly.
An interesting viewpoint is that the government more specifically the financial regulator ― the Financial Services Commission ― opposes the bill. The FSC argues the bill goes against market principles.
FSC chairman Kim Seok-dong clarified that the government should not interfere with the price-setting process in the market.
He said service fee rates for small merchants should be voluntarily decided by credit card firms: “Making the government set the commission rates goes against market principles.”
The Credit Finance Association, representing the credit card industry and credit card firms’ labor unions claims that the revision of the bill is in violation of the Constitution, which ensures basic rights such as the pursuit of happiness and property rights.
As the bill passed the Legislation and Judiciary Committee, card companies have pledged to fight on to the Constitutional Court, heralding a drawn-out battle between card firms and lawmakers.
The industry association said it will try to actively inform lawmakers of the potential problems in the proposed bill.
Top executives at major credit card firms including Shinhan, Samsung and Hana SK have agreed to join forces in opposing the bill that could hamper their business.
The dispute came after credit card firms gave in to the public pressure last year concerning the complicated commission system that supposedly favored only large conglomerates and levied burdensome rates on small restaurant owners.
Labor unions at credit card companies are strongly opposed to the revised bill that could hurt their companies’ profitability as well as job security.
A group of union members continued to stage a rally in Seoul, criticizing the revision to the bill that regulates the financial sector.
