SEOUL, Nov. 26 (Xinhua) -- South Korea's financial regulator said on Monday that it will lower credit card commission rates from next year for small businesses who struggled to overcome financial difficulties after the hike of minimum wage.
The decision was made after a meeting between the Financial Services Commission (FSC) and the ruling Democratic Party.
Under the scheme, the average commission rates paid to credit card issuers will be cut from the current 2.05 percent to 1.4 percent for small businesses that have an annual revenue of between 5 million won (4,434 U.S. dollars) to 1 billion won (886,000 U.S. dollars).
It was forecast to reduce credit card processing fees by as much as 3.2 million won (2,800 U.S. dollars) per year for the small self-employed such as convenient stores, restaurants and supermarkets.
The commission rates for companies with an annual revenue of between 1 billion won (886,000 U.S. dollars) and 3 billion won (2.7 million U.S. dollars) will be lowered from 2.21 percent to 1.6 percent.
The credit card processing fees for firms that earn 3 billion won (2.7 million U.S. dollars) or more per year will also be cut from next year, but companies with an annual revenue of more than 50 billion won (44.3 million U.S. dollars) will not be subject to the lowered commission rates as they have their own bargaining capability.
The measures came as small businesses were struggling to tide over financial difficulties following the government's decision to raise minimum wage.
The minimum wage was lifted by a double-digit for two straight years as the Moon Jae-in government advocated a growth to narrow income disparity by increasing income of low-income bracket.
