SEOUL, July 25 (Korea Bizwire) – Korea’s government, financial authorities and credit card companies have sat down to discuss implementing a cutback in credit card fees for public interest-serving institutions.
Within the latter half of this year, the Credit Finance Association of Korea is planning on commissioning policy think tanks such as the Korea Development Institute for a study for ways to reduce credit card fees for public interest institutions such as universities.
The think tanks will conduct research on how much cut in credit card fees will be feasible and reasonable, and financial authorities are hoping that they will be able to formulate a detailed plan to cut down the commission for public interest groups.
Currently, a number of quasi-public bodies including many of universities have been turning down credit card payments by students, saying that card commissions are too costly. As of now, there are only 110 universities (32%) out of 340 which allow credit card payment on tuitions and over 70 percent of the universities’ extended payment plans allows for only two to three installments.
This has brought inconveniences on the consumers’ behalf, especially for university students and parents and thus, opinions demanding diversification of payment methods have been looming.
To remedy such matters, the government has made progress and is looking into implementing policies such as giving lower subsidies to universities that do not allow credit card payment of tuition and granting various incentives for universities that offer diverse payment methods.
A legislator Shim Jae-chul (New Frontier Party) said on July 22, “The government has taken an initiative to discuss with universities and credit card companies the ways to exempt commissions for credit card payment of tuition fees and increase the number of installments to six to 12 months, to relieve the financial burden of the university students and their parents while not hurting universities’ finances at the same time.”
On the other hand, some have argued that not only universities, but such places as hospitals and pharmacies serve public interest as well and they should also be the subjects of the card fee exemption. Mobile communications service is sometimes regarded as serving public interest as well.
Hence, coherent definition of “public interest” must be made before adopting cutback or exemption of commissions for public interest-serving groups.
A stringent interpretation of public interest will lead to a policy that will only tenuously improve consumer’s convenience and an outstretched interpretation of it will lead to a policy that will only bring about furious backlash from the card companies. Therefore, the meticulous study seems to be the prerequisite for adoption of the policy.
An official in one of the financial authorities said, “Adaptation of the measure will be preceded by detailed studies on its impact on different sections of consumers and industries. We will do our best to come up with a solution to enhance convenience in payments and fairness at the same time.”
By J. H. Kim (email@example.com)