Card companies to refund average 387,000 won to small merchants starting Friday

Small and mid-sized credit card merchants that opened in the first half of this year are eligible to receive an average refund of around 387,000 won in fees. About 61.47 billion won ($43.4 million) is set to be refunded to 159,000 merchants — working out to roughly 387,000 won per merchant. The refund covers the difference between the standard fee rate applied at the time of opening and the preferential rate available to small and mid-sized merchants.

The Financial Services Commission and the Financial Supervisory Service said Tuesday that preferential fee rates will apply to 3.094 million small and mid-sized credit card merchants with annual sales of 3 billion won or less, starting Friday. That accounts for 95.7 percent of all 3.235 million credit card merchants nationwide.

Small and mid-sized merchants are designated every half-year based on their sales volume. Depending on annual revenue bracket, preferential rates range from 0.4 to 1.45 percent for credit cards and 0.15 to 1.15 percent for debit cards.

Merchants with annual sales of up to 300 million won receive rates of 0.4 percent for credit cards and 0.15 percent for debit cards. For the 300 million to 500 million won bracket, the rates are 1.0 percent and 0.75 percent, respectively; for 500 million to 1 billion won, 1.15 percent and 0.9 percent; and for 1 billion to 3 billion won, 1.45 percent and 1.15 percent.

Newly opened merchants are treated differently. Immediately after opening, card companies cannot verify a merchant's sales volume through National Tax Service tax data or other sources, so they initially apply the standard merchant fee rate. Once sales figures are confirmed and the merchant is classified as small or mid-sized, it receives a refund of the difference between the fees already paid and the applicable preferential rate.

As a result, 159,000 merchants that newly registered as credit card merchants between Jan. 1 and June 30 this year and were subsequently confirmed as small or mid-sized will receive refunds of the fee difference.

The refund period covers Jan. 1 through Thursday. The total expected refund amount is about 61.47 billion won, averaging 387,000 won per merchant, though actual refunds will vary depending on each merchant's card sales volume and the fee rate previously applied.

For example, a merchant that opened on Jan. 1 this year and recorded 140 million won in credit card sales over roughly seven months while paying a 2.2 percent fee rate would receive a refund of 2.52 million won. Its annualized sales of about 240 million won fall within the under-300-million-won bracket, making it eligible for the retroactive application of the 0.4 percent preferential rate.

Each card company plans to deposit refunds into merchants' card payment accounts by Sept. 28. Businesses that opened during the first half of the year but have since closed are also eligible for refunds if they meet the requirements.

The Credit Finance Association began sending notices to merchants eligible for the second-half preferential rate on Aug. 7. Merchants can check their applicable fee rates through the Credit Finance Association, individual card company call centers, or the association's integrated merchant sales transaction inquiry system.

Sub-merchants using payment gateway companies in e-commerce transactions, as well as taxi operators, are also eligible for the preferential fee rates. Among PG sub-merchants, 1.999 million — or 92.0 percent of the total 2.172 million — qualify, as do 166,000 individual and corporate taxi operators, representing 99.4 percent of the total 167,000.

The preferential rate will also be applied retroactively to 132,000 PG sub-merchants and 5,675 taxi operators that newly opened in the first half of the year, with the fee difference to be refunded by Sept. 28.

Credit card merchants will be able to check their total refund amounts through the Credit Finance Association's integrated merchant sales transaction inquiry system starting Sept. 28. PG sub-merchants and taxi operators can confirm their refund details through their respective PG companies or transportation settlement operators.