Financial Supervisory Service Conducts Inspection on KakaoPay for Compliance with Electronic Financial Transactions Act

[Asia Economy Reporter Kim Hyo-jin] The Financial Supervisory Service (FSS) has launched an inspection of Kakao Pay.

According to financial authorities and the financial sector on the 21st, the FSS is currently conducting an on-site inspection of Kakao Pay.

During this inspection, the FSS is examining the information technology (IT) sector of Kakao Pay, an electronic financial business operator, but it is interpreted to be similar in nature to the comprehensive inspections conducted on banks and other financial companies.

Banks, insurance companies, and card companies undergo separate comprehensive and IT inspections, whereas electronic financial business operators only undergo IT inspections.

The FSS is reportedly reviewing compliance with the Electronic Financial Transactions Act during the inspection, including whether Kakao Pay's capital adequacy meets regulatory standards and whether personal information is properly managed.

Kakao Pay is also being inspected for compliance with the "Guidelines for User Fund Protection by Electronic Financial Business Operators" related to the management of prepaid recharge funds.

Prepaid recharge funds received from customers must be separated from proprietary assets and entrusted to external institutions such as banks. If prepaid recharge funds are managed as non-current assets, payment guarantee insurance must be subscribed.

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