The financial authorities ordered Chinese online travel agency (OTA) Trip.com to halt sales of gift cards in Korea. Trip.com sold gift cards to Korean customers without registering for the prepaid business with the domestic financial authorities, sparking controversy that it violated the Electronic Financial Transactions Act.
On the 8th, according to the office of People Power Party lawmaker Kim Jae-seop and the financial authorities, Trip.com recently stopped selling gift cards to domestic customers. Trip.com sells gift cards by changing the country and language settings on its website and application (app), but it did not register for the prepaid business with the Financial Services Commission (FSC). Trip.com has grown its user base by offering discount sales of gift cards and awarding users its own issued coins.
Gift cards are a means of payment used for payments and refunds (reimbursements), equivalent to prepaid balances. Businesses that sell gift cards must register with the Financial Services Commission (FSC). Violations can result in imprisonment of up to three years or a fine of up to 20 million won.
On Oct. 10 at the National Policy Committee's parliamentary audit, lawmaker Kim Jae-seop said Trip.com's sales practice induced a detour payment to evade domestic regulations. In response, the financial authorities took follow-up measures and ordered Trip.com to stop selling gift cards.
An official from Kim's office said, "Trip.com has currently halted gift card sales, and the financial authorities are proceeding with follow-up measures."
The financial authorities are also investigating companies other than Trip.com that issue gift cards or coins to domestic customers.