South Korea's financial authorities have sharply expanded disclosures of payment fee rates by electronic financial firms, with average payment fee rates falling. But critics say the effect felt by micro merchants is not large.

The financial authorities on Jan. 13 announced the results of payment fee-rate disclosures by 17 electronic financial firms for August to October 2025, in line with guidelines revised in November 2025. This disclosure expanded the companies covered and the items released, enabling comparisons among firms.

More fee disclosures, average rates fall

The disclosure showed the 17 firms' amount-weighted average payment fee rate was 1.97 percent for card payments and 1.76 percent for prepaid payments. Compared with the previous disclosure for the first half of 2025, card fees fell 0.06 percentage points and prepaid fees fell 0.09 percentage points.

Even among the 11 firms previously covered by disclosures, card fees edged down to 2.02 percent and prepaid fees to 1.79 percent. The figures show an overall trend of fee reductions.

The financial authorities have sought to spur fee competition to reduce payment fee burdens for micro and small merchants. They expanded the disclosure threshold from "simple payments of 100 billion won or more a month" to "total payments of 500 billion won or more a month." As a result, six firms including NHN KCP, Nice Information Service, Korea Information & Communications, Tmoney, Galaxia Moneytree and KSNET were newly included, lifting the total to 17 companies.

The firms' average monthly payment volume is 30.8 trillion won, or 75.8 percent of total electronic financial industry payment volume. The representativeness of the disclosure also expanded sharply from 49.3 percent.

The latest disclosure moved beyond releasing fees in a single lump sum by separating "externally collected fees" paid to card issuers and "internally collected fees" retained by electronic financial firms. The aim was to make clearer where labour costs, marketing costs and margins arise. The financial authorities assessed that this improved the transparency of fee structures.

Limited impact for micro merchants

For card payments, the structure of applying lower fees to micro and small merchants with smaller sales generally remains in place. For prepaid payments, many electronic financial firms also apply differentiated fee rates depending on merchant sales 규모, the disclosure showed.

But not all electronic financial firms follow that structure. Some firms apply the same fee rate regardless of merchant sales, or charge higher fees to smaller merchants, the authorities said. Regulators view such charging practices as being at odds with the intent of fee guidelines aimed at easing burdens on micro and small merchants.

Disclosed cases show a clear gap in prepaid payment fees. Baedal Minjok applied a fee rate of around 3 percent even to micro merchants regardless of merchant size, while Kakao Pay was tallied as applying 0.24 percent to micro merchants.

That has led to assessments that, despite the drop in average fee rates, the effect of easing burdens on micro merchants may be limited. Critics say additional checks are needed on whether the system's intent is working in practice, given that on-the-ground perception differs from the numerical changes. This is the backdrop to ongoing debate over so-called "reverse discrimination" against micro merchants.

The industry says fee structures are not simple. Electronic financial firms incur external fees paid to card issuers and various discount and promotion costs in addition to the fee rates applied to merchants.

An industry official said, "In a structure that applies differentiated fees, when lower fees are applied, the electronic financial firm may end up absorbing the cost internally." The official added, "Once promotion and marketing costs are included, there are sections where the structure effectively shows the electronic financial firm shouldering the costs."

The financial authorities plan to share cases of unreasonable fee-charging practices with the industry based on the results of this pilot disclosure. They aim to encourage a reasonable fee calculation system that considers coexistence with small business owners.

A financial authorities official said, "We will continue to enhance information transparency by gradually expanding the scope of disclosure and strengthening the obligation to notify merchant fee rates."