Citing Collusion, E. Mart Stops Accepting Some Credit Cards

E. Mart, a giant discount store in Korea, has decided not to accept the BC Card from September 1. Consumer inconvenience is expected to increase because of this, especially before the harvest festival, Chuseok, as E. Mart takes a policy of abandoning contracts with joint shops one after another if KB Card of Kookmin Bank and LG Card raise their service charges.

E. Mart announced, “We will not accept the BC Card in 65 nationwide shops starting from 10 a.m. on September 1. We will make an effort to minimize our customers’ inconvenience by posting a notice and sending an announcement on the air.”

E. Mart also said, “The KB Card of Kookmin Bank informed us they were going to raise service charges starting from September 6, and LG Card did so starting from early September. If the service charges are actually raised, we will not accept those cards by abandoning contracts like in the case of the BC Card.”

As of the first half of this year, 43,000 customers used the BC Card, 24,000 used the KB Card, and 17,000 used the LG Card on an average weekday in E. Mart all over the country. Therefore, if E. Mart abandons joint contracts with the three card companies, it is expected that an average of 84,000 customers per weekday and 135,000 customers on weekends will not be able to use the cards.

Meanwhile, E. Mart announced it would indict the three card companies—BC Card, KB Card, and LG Card—that informed the company of a policy of imposing service charge increases last month at intervals of several days, to the Fair Trade Commission, charging the credit card companies with a violation of the fair trade law.

E. Mart mentioned the reason for the indictment as, “There is a strong suspicion of collusion, which is prohibited by the fair trade law, because the three credit card companies informed us of their planned service charge increases of a similar rate over a similar period.”

bonhong@donga.com