[Photograph by Yoo Dae-gil = dbeorlf123@ajunews.com]
SEOUL -- The city of Seoul officially launched "Zero Pay", a zero-fee digital payment system, in an alliance with banks and financial technology (fintech) firms to ease the burden of transaction fees for small and medium-sized businesses.
According to a 2017 government study, more than 80 percent of transactions in South Korea were made with credit cards. Because every credit card payment incurs a fee, some shop owners have to pay more than 30 percent of their monthly sales as transaction fees.
Seoul said in a statement Thursday that it launched Zero Pay in partnership with 20 banking services including major banks and four digital payment companies. However, KakaoPay, South Korea's most widely used mobile payment service operator, stayed away as its platform is not compatible with Zero Pay.
Zero Pay can be activated by taking pictures of QR codes, a machine-readable optical label and putting the amount of money into mobile banking service smartphone apps or digital payment apps. Once the verification process is finished, money will be transferred directly from a bank account.
Zero Pay will charge no transaction fee for business operators with annual sales of under 800 million won ($708,820). For those with annual sales of between 800 million won and 1.2 billion won will be charged with a 0.3 percent transaction fee and 0.5 percent for businesses with annual sales of more than 1.2 billion won. Credit card companies charge 2.2 percent.
Seoul city mayor Park Won-soon said in a ceremony that Zero Pay would help shop owners who suffer from expensive transaction fees. "If consumers and citizens use Zero Pay whenever possible, it will be a great help for self-employed businessmen."
The mayor said that consumers would be given an income tax deduction of 40 percent and other benefits such as discounts on admission fees to facilities such as city-run zoos, museums and art centers. Some 16,750 stores have signed up for the Zero Pay program. Seoul city plans to develop a new system for convenience stores and franchise stores by March next year.
reporter
Park Sae-jin
swatchsjp@ajunews.com
