Passing Apple Pay fees onto consumers inappropriate: top financial regulator

By Jun Ji-hye

Passing fees on to merchants or consumers would be inappropriate as credit card companies accelerate efforts to introduce Apple Pay, the country’s top financial regulator said Monday.

While he acknowledged that fee-related matters are fundamentally beyond the direct involvement of financial authorities, he did signal that regulatory intervention could follow if issues such as fee transfers or service reductions arise in the future.

“It is not fundamentally within the financial authorities’ scope to intervene in how credit card companies and Apple Pay handle fees, but passing them on to merchants and consumers is inappropriate,” Kim Byoung-hwan, the chief of the Financial Services Commission, said at a press conference on Monday. “When reviewing Apple Pay’s terms in 2023, a condition was attached to prevent such fee transfers.”

The comments come at a time when credit card firms such as Hyundai Card and Shinhan Card are undergoing regulatory review to introduce Apple Pay.

Kim stated that Apple Pay, so far, accounts for only a minimal share of market transactions, and vows to closely monitor its expansion and impact on the market.

“If the situation escalates to a point where a policy shift is necessary, [regulatory intervention] would be considered,” he said.

In response to concerns that consumer benefits could be indirectly reduced, he said, “That is ultimately a decision for credit card companies to make.”

The comments were interpreted as suggesting that credit card companies should bear the responsibility for the fees associated with digital wallet services.

It aligns with the stance of Lee Bok-hyun, governor of the Financial Supervisory Service, who previously argued that card companies should absorb the fee burden.