November 10th is the annual university entrance exam. Usually many companies that start at 9am change the time to 10am to reduce the traffic for students traveling to the exam.
Logging onto HSBC this morning there was an announcement stating branch hours would be 10am to 5pm this Thursday. I haven't seen anything on any of the other banks websites in English, but it's worth checking, and if you go to the bank early and they're closed, don't panic.
Monday, 7 November 2011
Saturday, 5 November 2011
Is it time for the FSS to act on Credit Cards?
Many merchants in Korea are currently protesting about the high merchant fees they have to pay to accept credit cards. See this Koreatimes story. The government looks like it will do something, but what?
In Australia merchants are allowed to surcharge the customer for paying by card. In Korea many small merchants do this unofficially by telling the customer they can make a purchase VAT free if they pay by cash. I do not believe that surcharging is the answer, as many Australian businesses use surcharging as another cash grab Choice Australia survey of retailer surcharging margins. My problem with credit card surcharging is that it discriminates against one type of customer. As a former business owner I know that handling cash also has costs. You have your time to count the takings, the insurance for the cash, the time taking it to the bank or the cost of the security card to do that, and finally the risk to yourself and your employees of theft. I believe that taking cash is more expensive than taking credit cards so that surcharging is not the answer.
The credit card companies could take this opportunity to lower merchant fees and increase annual card fees. Unfortunately many Korean businesses still measure success on turnover rather than profitability. There would be pain as a number of Koreans may cancel some of the plastic they hold. This would probably make the Financial Supervisory Service (FSS) quite happy. I guess a minimum annual fee of w20,000 would be effective with no fee exemptions. Of course the credit card companies will never voluntarily do this and it would be a very courageous government that made a law increasing the price of everyone's credit cards.
Another solution would be to ban credit card points schemes. Why should I be rewarded for not using my money? Removing rewards schemes would allow merchant fees to drop significantly and is also probably the secret dream of every credit card company executive. But won't the children scream if we lose our candy. No credit card company will do this, and although there would be some short term pain for the government if they act, I believe it would be quickly forgotten.
Maybe I am being too negative, perhaps the credit card companies can see that they will be facing some frankly draconian regulations if they don't get their house in order, but I doubt they will act without significant government coercion.
In Australia merchants are allowed to surcharge the customer for paying by card. In Korea many small merchants do this unofficially by telling the customer they can make a purchase VAT free if they pay by cash. I do not believe that surcharging is the answer, as many Australian businesses use surcharging as another cash grab Choice Australia survey of retailer surcharging margins. My problem with credit card surcharging is that it discriminates against one type of customer. As a former business owner I know that handling cash also has costs. You have your time to count the takings, the insurance for the cash, the time taking it to the bank or the cost of the security card to do that, and finally the risk to yourself and your employees of theft. I believe that taking cash is more expensive than taking credit cards so that surcharging is not the answer.
The credit card companies could take this opportunity to lower merchant fees and increase annual card fees. Unfortunately many Korean businesses still measure success on turnover rather than profitability. There would be pain as a number of Koreans may cancel some of the plastic they hold. This would probably make the Financial Supervisory Service (FSS) quite happy. I guess a minimum annual fee of w20,000 would be effective with no fee exemptions. Of course the credit card companies will never voluntarily do this and it would be a very courageous government that made a law increasing the price of everyone's credit cards.
Another solution would be to ban credit card points schemes. Why should I be rewarded for not using my money? Removing rewards schemes would allow merchant fees to drop significantly and is also probably the secret dream of every credit card company executive. But won't the children scream if we lose our candy. No credit card company will do this, and although there would be some short term pain for the government if they act, I believe it would be quickly forgotten.
Maybe I am being too negative, perhaps the credit card companies can see that they will be facing some frankly draconian regulations if they don't get their house in order, but I doubt they will act without significant government coercion.
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