Baedal Minjok charges highest transaction fees to vendors
The Financial Supervisory Service office in Yeouido, Seoul (Yonhap)
South Korea's food delivery app Baedal Minjok, or Baemin, has been charging the highest fees to its vendors among the country's top nine e-commerce platforms, according to government data released on Friday.
The Financial Supervisory Service, the country's financial regulator, unveiled commission rates of nine online e-commerce platform operators that generate transaction volumes exceeding 100 billion won ($77 million) a month.
In terms of transactions made by credit card, Baemin, operated by Woowa Brothers, has been charging the highest commission rates. The company charges a 1.52 percent commission rate from small-sized vendors that sell their products on the delivery platform, while charging 3 percent rate to mid and large-sized vendors.
South Korea’s leading open market operator 11th Street has been imposing a 1.3 percent commission rate from small-sized vendors and 2.9 percent from bigger vendors. Another open market operator GMarket’s commission rates came to 1.08 and 2.59 percent.
The commission rates for small and larger vendors on Kakao Pay reached 1.21 and 1.4 percent, and those for e-commerce giant Coupang came to 1.03 and 2.5 percent.
In terms of commission rates for transactions made through digital cash – which customers keep in their virtual wallet on each platform -- Woowa Brothers also charged the highest commission rate of 3 percent, followed by SSG.com with 2.5 percent and GMarket with 2.49 percent.
The commission rates from these online platform operators were found to be four to six times higher than the rates charged by credit card companies, which range between 0.25 and 0.5 percent, the FSS said.
Some argued that the commissions that these online commercial platforms charge from vendors could be much higher, as there are other commission fees that online vendors pay in addition to fees involving transactions made by credit cards and easy pay money.
The FSS currently plans to announce its commission rates on a regular basis, twice a year.
“As commission rates are disclosed, (the government) expects companies to compete on commission rates, which will result in reasonable fees in the future,” an official from the FSS said. “Online vendors will also be gradually less burdened from commission fees, as they will be able to better negotiate with e-commerce platforms.”
Meanwhile, Kakao Pay said Friday that the company will lower commission rates by around 1 percent for transactions made with digital cash, in line with the government's efforts to lower the commission burden on the self-employed.
By Shim Woo-hyun (email@example.com)