Bank of Korea: "OO Pay Transaction Data to KFTC? The Amendment to the Electronic Financial Transactions Act Is a Big Brother Law"

[Image source=Yonhap News]

[Asia Economy Reporter Eunbyeol Kim] The Bank of Korea has urged the deletion of related provisions in the amendment to the Electronic Financial Transactions Act (EFTA), which is about to pass the National Assembly, citing vulnerabilities in protecting personal transaction information.

It argues that the structure, where all charging and transaction details through big tech (large information and communication companies) payment methods such as Naver and Kakao Pay are collected in one place at the Korea Financial Telecommunications and Clearings Institute (KFTC), and the Financial Services Commission (FSC) can review them, is problematic.

In the statement titled "Position on the Big Brother Issue in the Amendment to the Electronic Financial Transactions Act" distributed on the 17th, the Bank of Korea emphasized, "The amendment is a Big Brother (social surveillance and control power) law," and "If the amendment passes, the FSC will be able to collect all transaction information of big tech companies like Naver through the KFTC without significant restrictions."

According to the amendment, big tech companies must mandatorily provide all customer transaction information to the KFTC, and if violated, they face fines of up to 50% of their revenue. The FSC can access this transaction information collected by the KFTC without significant restrictions. Since the FSC holds authorization, supervision, and regulatory powers over the KFTC, it can issue data submission orders and conduct direct inspections.

In this process, major laws related to personal information protection are also exempted. The exempted legal provisions include ▲ Article 4 of the Real Name Financial Transactions and Confidentiality Act (Guarantee of Financial Transaction Confidentiality) ▲ Articles 32 (Consent for Provision and Use of Personal Credit Information) and 33 (Restrictions on Use of Personal Credit Information) of the Credit Information Use and Protection Act ▲ Article 18 of the Personal Information Protection Act (Restrictions on Use and Provision of Personal Information for Purposes Other Than Intended), among others.

The Bank of Korea commissioned legal reviews of these amendment provisions to two domestic law firms and received responses indicating "there is a possibility of Big Brother controversy."

Law Firm A stated, "This bill grants the FSC broad access rights to big tech internal transaction information held by clearing institutions, making it difficult to avoid Big Brother issues."

Law Firm B responded, "As electronic payment transaction clearing is conducted through clearing institutions, if excessive information such as user information (name, ID, etc.), transaction information (usage medium, counterparties, etc.), and deposits (points, etc.) of big tech company users concentrates in electronic payment transaction clearing institutions, concerns about Big Brother may arise."

The Bank of Korea argued, "The FSC cites user protection and transaction transparency as reasons for collecting big tech company transaction information, but this is like installing CCTV in every home to prevent domestic violence and watching them," adding, "Excessive acquisition of personal transaction information by a specific institution violates Article 3 of the Personal Information Protection Act, the 'principle of minimum necessary collection.'"

According to confirmation through the People's Bank of China, even the Chinese government does not look into internal transactions of big tech companies, the Bank of Korea explained.

The Bank of Korea stated, "Since payment and settlement systems operated and managed by the central bank are the foundation of the financial system that resolves creditor-debtor relationships among economic agents, safety is crucial," and "We oppose the use of such payment and settlement systems as a means to collect transaction information of big tech companies, and the Big Brother-related provisions should be deleted."

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