BC Card’s expansion of direct-approval connections for large online merchants has dragged Korea’s payment-gateway industry back into a public fight over fees, turf, and who owns the plumbing between a shopper’s card and a platform’s checkout page. The card company says it is offering a transaction-relay service that lets big franchises skip traditional payment-gateway and VAN hops; PG operators say BC is muscling into lanes they built over three decades.
In Korea’s standard online stack, a sale often travels merchant → PG → VAN → card company. Platforms such as Coupang, Baemin, and Naver already invested in in-house pay rails to compress that chain. BC Card positions itself as the neutral relay when those merchants want direct contracts with multiple issuers but do not want to rebuild messaging infrastructure for each bank.
What BC says it is doing
BC executives have described the relay as a technical service inside the authorization path—not a new PG license in disguise. By handling message exchange, the card company argues, merchants cut duplicate system costs while still meeting network rules. BC has targeted high-volume e-commerce accounts where a few basis points on interchange and agency fees translate into tens of billions of won annually.
The company’s research arm has simultaneously struck conventional PG partnerships for smaller merchants, a dual track that PG critics call selective: help micro sellers through allied gateways while peeling away the most profitable volume.
Why PGs are protesting
The Korea PG Association has accused BC of permanent infringement on electronic-payment agency rights and warned of monopoly risk if card issuers become their own routers. Member firms—including Nice Payments, Toss Payments, KG Inicis, and NHN KCP—have staged demonstrations outside KT’s headquarters in central Seoul, BC’s parent, demanding fair competition rules.
PG leaders argue that relays look like rebates dressed as technology: the savings flow to whales, while small shops still pay full stack fees. They also fear BC will extend direct VAN purchase programs to other issuers, shrinking the addressable market for standalone gateways.
Merchants in the middle
For Coupang-class platforms, every removed intermediary is margin. Direct approval can lower authorization latency and simplify reconciliation when a single company operates marketplace, logistics, and payments. Yet merchants must still maintain PCI-grade security and fraud tools that PGs bundled as part of their service fee.
Regulators at the Financial Services Commission and Fair Trade Commission have not issued a final ruling in the latest flare-up, but prior guidance has treated card-company innovation cautiously when it bypasses licensed payment agencies. Any settlement will likely hinge on whether BC’s relay is classified as infrastructure sharing or competitive acquiring.
Market stakes
Korea’s electronic payments market processed trillions of won through PGs during the mobile-commerce boom. If direct approval spreads beyond BC to Shinhan, Hyundai Card, or Kakao’s banking units, gateway revenue models built on volume-based bps could erode faster than cost structures allow.
Investors in listed PG names have already treated regulatory headlines as trading cues. For consumers, checkout may look unchanged even as the fee waterfall behind the button shifts. The fight is really between incumbents over who keeps the slice between authorization approval and settlement file—a slice that used to be invisible until platforms grew large enough to demand a direct line.
What regulators could do next
Financial authorities could require firewalls so card-company relays cannot cross-sell acquiring data to merchant lending units, or cap the share of volume that may bypass licensed PGs. Europe’s PSD2 journey showed that mandating access can coexist with licensed intermediaries if technical standards are neutral. Korea’s smaller market may instead favor negotiated codes of conduct between the PG Association and BC Card before legislation hardens positions.
Banks that issue BC-branded cards face their own choice: support a parent affiliate’s relay revenue or protect interchange economics when merchants route around gateways tied to the same banking group. That tension will surface in closed-door working groups long before it hits investor presentations.