[THE INVESTOR] A major financial consumer group denounced Visa on July 18 for its plan to raise the fees for overseas credit card purchases by South Koreans, warning that it may launch a nationwide boycott of the global payment network.
Visa announced that it would press ahead with the fee hike plan despite strong opposition from local card firms.
The California-based company argued that it’s inevitable to jack up the fee rate from 1.0 percent to 1.1 percent starting next year due to increased facility investments in the nation.
The Korea Finance Consumer Federation described it as a “tyranny-style” behavior targeting South Korean credit card issuers alone, not their Chinese or Japanese peers.
“If the international fees are raised, domestic card firms, suffering a drop in profitability, will pass their burden to consumers in any form,” it pointed out.
Visa is seeking a “unilateral step” to take advantage of its dominant market status in South Korea, and lacks reasonable ground to make such a move.
The group said Visa has made massive profits in South Korea by taking a “free ride” on the government’s policy of promoting credit card use.
