"Fear of Losing Customers" Banks Avoid, Expansion of 'Certificate Choice' Remains Uncertain (Comprehensive)

KakaoPay and Toss Certificates Surpass 20 Million Issued
Most Banks Avoid Them Due to 'Security Incident Liability' Concerns
Some Analyze It as 'Checks on KakaoBank and TossBank'

[Asia Economy Reporter Kim Hyo-jin] Although the public certification system was abolished on the 10th and a new authentication market opened, the atmosphere has not yet led to an expansion of choice for financial consumers.

In particular, while some big tech companies (large information and communication companies) have rapidly increased users of their certificates and formed a foundation for universal use, banks with high authentication demand are reluctant to adopt them due to concerns over customer attrition, leading to criticism that each is forming a 'league of their own.'

According to the banking and IT industries on the 28th, among the five major commercial banks?KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup?none have adopted KakaoPay or Toss certificates.

KakaoPay and Toss certificates have been evaluated as leading the non-bank authentication market, with cumulative issuance exceeding 20 million to date.

SC First Bank is the only commercial bank that has adopted these certificates. The five major banks mainly conduct transactions using their own certificates and financial certificates jointly developed with the Korea Financial Telecommunications & Clearings Institute. Some banks have adopted or are considering adopting the PASS certificate from the three major telecom companies.

KakaoPay and others have continuously sought partnerships with major banks even before the abolition of the public certification system, but banks have expressed reluctance citing issues such as responsibility for security incidents.

A bank official said, "Unlike the old public certification, private certificates from external sources mean that the adopting bank is fully responsible in case of an incident," adding, "It seems that more time is needed to resolve these concerns based on security verification."

Another bank official bluntly stated, "There are no plans to consider adoption for the time being."

Some Viewpoints Suggest 'Negative Partnership Due to Competition with Big Tech'

However, some analyses suggest that banks are negative about partnerships because they are conscious of future competition with big tech companies.

In the case of KakaoPay, it is connected with KakaoBank, which is rapidly expanding in the loan sector, and Toss is also aiming for synergy with Toss Bank, which will launch next year, so they cannot help but be cautious.

An IT industry official explained, "The general evaluation is that both big tech certificates and those developed by banks have better security and convenience than the old public certification," adding, "The fact that financial companies other than banks are increasingly adopting big tech certificates is proof of this evaluation."

Currently, KakaoPay and Toss have authentication business partnerships with SC First Bank and many financial companies such as securities and insurance firms. KakaoPay has about 200 partner institutions.

A financial industry official pointed out, "The government's and financial authorities' intention in abolishing the public certification system and fostering the private authentication market is to allow consumers more choices based on competition within the market," adding, "If the current trend continues, it might only result in each player dividing the market among themselves."

This content was produced with the assistance of AI translation services.