Financial Services Commission: "Even before the 'Jeongeum Act', support for launching small-amount postpaid payment services through sandbox"

Do Gyu-sang, Vice Chairman of the Financial Services Commission, "Actively Support Platform Innovation Financial Services... Prompt Legislation of the Electronic Financial Transactions Act"
Digital Sandbox Supporting Fintech Development, Fintech Development Support Act Also Prepared

[Image source=Yonhap News]

[Asia Economy Reporter Wondara] The Financial Services Commission has announced its plan to allow the launch of small-amount deferred payment services through the regulatory sandbox even before the amendment to the Electronic Financial Transactions Act, which is currently pending in the National Assembly. The deferred payment services that simple payment providers such as Naver Pay and Kakao Pay intend to offer have been delayed due to the lack of a foundational legal framework.

At the 6th Digital Finance Council held on the morning of the 9th at the government complex in Jongno-gu, Seoul, Do Gyusang, Vice Chairman of the Financial Services Commission, stated, "We will actively support the swift launch of new and innovative financial services such as small-amount deferred payments through platforms," and added, "We will strive to expedite the legislation of the amendment to the Electronic Financial Transactions Act. Even before the law is amended, we will support service launches by utilizing the financial regulatory sandbox."

The Financial Services Commission plans to submit the small-amount deferred payment service agenda to the Innovation Finance Review Committee scheduled for this month for consideration. Once launched, this service will enable financially vulnerable groups, such as young adults and housewives with relatively low credit scores, to use deferred payment services based on non-financial data accumulated by platforms.

"Existing financial sandbox has limitations... Introducing 'Digital Sandbox' to provide opportunities for fintech companies and actively relax additional conditions"

The Financial Services Commission also decided to introduce a digital sandbox. Vice Chairman Do explained, "The existing financial regulatory sandbox had limitations in testing creative ideas from fintech and startups," adding, "We will provide fintech companies with opportunities to pilot their ideas and actively relax additional conditions for services whose stability has been verified."

Regarding the MyData industry, which took its first step with official approval last month, he said, "We will expedite support for small and medium fintech companies through MyData intermediary institutions and the establishment of an integrated MyData authentication system to help the MyData industry settle quickly." Small and medium-sized fintech companies operating in the MyData industry will be able to use intermediary institutions such as the Credit Information Service for MyData, reducing the burden of API construction. The integrated authentication system will improve the authentication process, which previously required repeating authentication procedures for each financial company providing MyData information.

A Fintech Promotion Support Act will also be prepared to revitalize fintech investments by financial companies. Vice Chairman Do said, "There have been many voices that close collaboration is difficult due to a lack of contact points between financial companies and fintech," and added, "We will enact the Fintech Promotion Support Act to establish clear legal grounds for financial companies' investments in fintech." The Fintech Promotion Support Act will clearly define the fintech companies that financial companies can support and include provisions for exempting executives and employees from liability in case of investment losses. Vice Chairman Do emphasized, "Although several institutional improvement tasks are being discussed today, we will continue efforts to communicate continuously with the field and discover new institutional improvement tasks."

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