2024-03-31 23:02:16
Even in the event of hacking or fire at a pay company
Prepaid deposit balance is ‘safe’
The Financial Services Commission is promoting a plan to store prepaid recharge balance information in real time so that the exact amount can be refunded to consumers even in the event of an accident such as a fire or hacking. Prepaid recharge refers to recharge deposited for shopping at simple payment companies such as Naver Pay or Kakao Pay. The purpose is to prevent the recurrence of incidents such as ‘Merge Point’, which caused hundreds of billions of won in damage to consumers by suspending refunds in 2021, and to further strengthen consumer protection related to recharges.
According to the Financial Services Commission and the prepaid recharge industry on the 31st, financial authorities are promoting the introduction of an ‘external recording and management system for prepaid recharge information.’
With the revision of the Electronic Financial Transactions Act (Electronic Money Transfer Act) in September last year, the scope of prepaid services was expanded and separate management of recharges became mandatory. In relation to this, the Financial Services Commission is considering introducing an external storage system in the process of revising the Enforcement Decree of the Electronic Money Act by September of this year, and recently held a briefing session for related industries at the Korea Financial Telecommunications and Clearings Institute.
As the recharge market continues to grow, there are voices calling for consumer protection measures to be proportionate. According to the Financial Supervisory Service, the size of prepaid recharges is 1.6 trillion won in 2019, 2.1 trillion won in 2020, and 2.9 trillion won in 2021. Looking at this growth rate, the current size is estimated at 4 trillion won.
The purpose of the external recording and management system is to create a type of ‘backup data’ so that recharges can be accurately refunded to consumers. Even if a fire breaks out in the data center or a company goes bankrupt and business becomes paralyzed, as in the Mersey Point incident, the purpose is to confirm and refund the exact balance of the recharge for each consumer at the time of the incident through information stored externally.
An official from the Financial Services Commission said, “We are reviewing measures to strengthen consumer protection under the principle of Zero Trust.”
In relation to this, there are also complaints that big tech companies with their own backup systems may be subject to ‘double regulation’. In addition, some in the prepaid charging industry claim that with the introduction of this system, ‘internal transaction information for each company will be collected’ and ‘costs will increase because a separate corporation must be established.’
However, an official from the Financial Services Commission explained that related claims are different from the facts, saying, “Under the Personal Information Protection Act, the Financial Services Commission and the Financial Services Commission are not permitted to receive or view recharge details.”
Some in the financial sector say that since there remains anxiety among consumers regarding recharges, consumer protection systems related to this will also be strengthened further in the future. One of the reasons behind the revision of the Deposit Act last year was to prevent advance payment service providers from conducting separate businesses using customers’ recharge funds. With the revision of the law, advance service providers must separately manage an amount equivalent to 50% or more of the recharge through trust, deposit, or payment guarantee insurance, and manage this recharge as a safe asset.
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