Starbucks Korea's prepaid balance over roughly the past six years reached 2.6 trillion won, and the interest and investment revenue earned from it came to 40.8 billion won.
Although the amount of prepaid balances that consumers entrust to Starbucks is surging every year, critics say it falls outside the scope of the Electronic Financial Transactions Act and is in a blind spot of oversight by the financial authorities.
According to "Starbucks Korea prepaid balance size and cash-equivalent asset management details" obtained by People Power Party lawmaker Kang Min-guk, a member of the National Policy Committee, from the Financial Supervisory Service and others on Oct. 19, from 2020 through Aug. this year, the number of prepaid top-ups totaled 81.13 million, and the aggregates of prepaid balances came to 2.6249 trillion won.
The size of prepaid balances grew each year from 184.8 billion won in 2020 to 340.2 billion won in 2021, 440.2 billion won in 2022, 545 billion won in 2023, and 660.3 billion won in 2024. As 454.4 billion won in prepaid funds flowed in through Aug. this year, the uptrend is expected to continue. Unused prepaid balances by customers also rose to 401.4 billion won as of Aug. this year, up about 123% from the end of 2020 (180.1 billion won).
Since 2020, Starbucks has managed the prepaid balances received from customers as cash-equivalent assets such as deposits and trusts, earning about 40.8 billion won in interest revenue.
Of this, about 60.5% (1.0826 trillion won) went into bank deposits, and the remaining 39.5% (707.3 billion won) was invested in nonbank products such as short-term money trusts and specific money trusts.
Starbucks' position is that it has invested in stable products such as short-term money trusts with guaranteed principal and interest, but given that trust products can be exposed to the credit risk of the managing institution, some argue there are limits to protecting customer funds.
Kang said, "Even though it is reaping more than 40 billion won in income by rolling the prepaid balances as if they were its own petty cash, it does not fall under prepaid electronic payment instruments under the Electronic Financial Transactions Act and thus does not undergo the FSS's supervision and inspection, which amounts to neglecting consumer assets."
A Starbucks Korea official said, "We accept the criticism that there are operational problems and will try to make improvements," adding, "We are likely to decide not to invest in nonbanking sectors."
An official at the financial authorities said, "Triggered by the 'T-MEP (Ticket Monster·WeMakePrice) incident,' we strengthened the management standards for prepaid operators compared with before, but there are some areas that were left out," adding, "While it is important to close regulatory blind spots, we will also carefully consider whether the scope of those regulated becomes excessive."