E-Mart: “We Don’t Take BC Cards”

The dispute over a transaction fee hike between BC card and E-Mart, Korea’s No.1 discount retailer, rages on, which will cause great inconvenience to consumers. As a protest to a transaction fee raise, E-Mart rejected BC cards in 65 outlets across the nation on September 1. BC card enforced the fee increase by raising the fee to two percent and at most to 2.35 percent from the current 1.5 percent.

The dispute between the two caused trouble for some customers who went shopping at a few E-Mart outlets. The customers who were unable to get their credit card approved were not able to buy some of the items they wanted or just bought the items that could be covered only by the amount of cash they had. However, there has not been such haggle that was predicted by the media.

“Isn’t That a Problem Between the Two Parties?”-

At an E-Mart outlet in Eungam-dong, Eunpyeong-gu, Seoul on Wednesday morning, Kim Gyeong-hui, a 33 year-old homemaker who appeared before the cashier with 40,000 won worth of goods in her shopping cart, found out that her BC card would not be accepted and wound up buying 16,000 won worth of goods in cash. She complained, “I only carried one credit card as usual. Both the credit card issuer and the discount retailer are to blame for the inconvenience that the customers are suffering from.”

Yang Byeong-sun, a 59 year-old homemaker, could only buy goods within the amount of cash she had after she was informed that her Hana Card, an affiliated card issuer with BC card, would be rejected at the shop.

According to E-Mart, the number of customers who asked to pay by BC cards is about 1,050 at the outlets around the nation at 5 p.m. on Wednesday afternoon. Among them, only 95 people gave up shopping because of the lack of cash while the rest paid in cash.

When Will the Dispute End?-

It appears hard for the two parties to reach a compromise since they are sticking to their own interests.

Gu Hak-seo, the president of Shinsegae Co., said, “If all of the credit card issuers go ahead with the fee raise plan, we will provide discounted prices with customers instead of taking credit cards.” He claimed, “As a discount retailer which sells items at the lowest price, we would have never taken a credit card in the first place with more than two-percent transaction fees.”

In the meantime, Lee Ho-gun, the president of BC Card Co., revealed, “If the transaction fee can be readjusted to a realistic level, the profit will be distributed to consumers, which is why we cannot reverse our decision.” He assured, “Even when we cannot make any progress during our negotiations with E-Mart, we can still start negotiations with other discounters including Lotte Mart and Home Plus.”

In other words, if other discounters fail to start negotiations on the higher fee, it is highly likely that they will have to go through the same phases that E-Mart has experienced: notification of a fee raise and a subsequent termination of credit card affiliate status. In fact, Lotte Mart did not sign its affiliate contract with BC Card last month when the credit card issuer hiked its transaction fees at its two new outlets in Jangyu-myeon, South Gyeongsang Province, and in Hwaseuong City, Gyeonggi Province.

In addition, KB Card informed E-Mart of its fee increase starting September 6. If so, E-Mart is planning on terminating its affiliate status with the card issuer. There seems to be no way to resolve the fee dispute between credit card companies and discounters in the foreseeable future.