The Financial Supervisory Service will shorten the submission cycle for business reports by electronic financial businesses, including Naver Pay and Kakao Pay, from semiannual to quarterly. The move aims to strengthen monitoring as unauthorized payments and data leaks by simple payment companies such as Gmarket and Coupang (Coupang Pay) have continued recently.
Electronic finance includes payment gateway (PG) services, prepaid services, debit services, escrow for settlement funds (ESCROW), and electronic bill presentment and payment (EBPP).
According to the financial authorities on the 14th, the Financial Supervisory Service (FSS) will shorten the submission cycle for business reports by electronic financial businesses to quarterly starting next year.
With the amended Electronic Financial Transactions Act passing the National Assembly's plenary session, starting next year step-by-step measures such as corrective action, business suspension, and registration cancellation became possible if an electronic financial business fails to meet management guidance standards such as capital adequacy. As a follow-up measure, the Financial Supervisory Service (FSS) said it is strengthening monitoring of electronic financial businesses.
Until now, electronic financial businesses submitted income statements, business performance, and asset status to the Financial Supervisory Service (FSS) twice a year.
The Financial Supervisory Service (FSS) is strengthening monitoring of electronic finance to tighten prudential supervision of PGs and others and to prevent user harm in advance.
The Financial Supervisory Service (FSS) also decided to check whether electronic financial businesses additionally engage in large-scale retail, mail-order sales, franchise businesses, and the like. It will also receive reports on merchant fees each quarter.
The Financial Supervisory Service (FSS) is strengthening monitoring of electronic finance because fraudulent payments by simple payment companies have continued. According to data the FSS submitted to People Power Party lawmaker Lee Yang-soo of the National Policy Committee, the total damage from fraudulent payment incidents identified by the FSS on electronic financial transaction platforms from January through Aug. this year was 220.76 million won. Gmarket accounted for the most at 160.74 million won (22 cases), followed by Coupang Pay (30.08 million won, seven cases) and Bizplay (19.87 million won, six cases). There were also incidents totaling 206.76 million won last year.
Recently, criticism has mounted that simple payments are in a regulatory blind spot, as personal information registered with Gmarket's simple payment service "Smile Pay" was stolen and gift certificates were purchased without authorization.
According to Bank of Korea statistics, the average daily amount of simple payments, including Naver Pay and Kakao Pay, in the first half of this year was 1.0464 trillion won.