SEOUL, Dec. 4 (Korea Bizwire) — More than 60,000 member stores of popular franchises across South Korea will be participating in the new government-led Zero Pay program.
The Seoul Metropolitan Government, Ministry of SMEs and Startups, Busan Metropolitan Government, and South Gyeongsang Provincial Office signed an agreement with 26 franchises on Monday to implement the Zero Pay system.
The government and local authorities will now attempt to entice customers to use Zero Pay, while franchises will be encouraging their member stores to join the program.
“Some 62,465 stores have either joined or intend to join the Zero Pay system,” said Seoul city officials.
In Seoul, 16,756 stores have signed up for the program, of which 11,766 stores are franchise vendors. Currently, there are 2.69 million stores that accept credit cards, while 150,000 stores allow KakaoPay.
The Zero Pay program is part of Seoul Mayor Park Won-soon’s vow to create 0 percent transaction fees, which eventually became a national agenda. The program will begin a pilot test on December 20.
Small businesses with under 800 million won in sales in the previous year will pay no fees for all transactions using Zero Pay.
Businesses with sales between 800 million won (US$722,600) and 1.2 billion won (US$1.08 million) will pay 0.3 percent, and businesses with sales over 1.2 billion won will pay 0.5 percent.
It is expected that businesses will benefit from the Zero Pay system, as current fees using other methods of payment typically vary from 0.8 percent to 2.3 percent.
Zero Pay’s income deduction rate will be 40 percent, which is significantly higher than credit cards (15 percent) or debit cards (30 percent).
Genesis BBQ Co., Tom N Toms, Ediya Coffee Co., Paris Croissant, Emart 24, GS Retail Co. and other major franchises will be joining the initiative.
H. M. Kang (email@example.com)