Amendment to the Electronic Financial Transactions Act: "Big Brother-style Privacy Surveillance" VS "Enhancing Financial Industry Competitiveness"

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[Asia Economy Reporter Kiho Sung] Controversy continues over the amendment to the Electronic Financial Transactions Act (EFTA) aimed at fostering fintech and revitalizing digital finance. Supporters argue that the amendment is essential to enhance the competitiveness of the financial industry, while opponents raise concerns about Big Brother-style privacy surveillance. Furthermore, with substantive discussions on the bill expected to be postponed until next month, conflicts are likely to persist for the time being.

On the 23rd, Min Byung-deok of the Democratic Party, Bae Jin-kyo of the Justice Party, the Jeongeuk Financial Business Labor Union, and the National Office Financial Services Labor Union held a forum titled "Issues and Response Tasks of the Electronic Financial Transactions Act Amendment" at the Korean Confederation of Trade Unions in Yeouido, Seoul, sharing opinions on the EFTA amendment submitted to the National Assembly.

First, Hye-kyung Jo, Senior Research Fellow at the Political Economy Research Institute Da-an, presented on "Problems and Suggestions Regarding the Regulation of Payment Service Providers in the EFTA Amendment," pointing out that "it could trigger controversy over Big Brother-style privacy surveillance and violations of individuals' constitutional right to self-determination of personal information." She criticized that "according to the amendment, transaction information can be transferred to a central clearing institution without user consent, and the central clearing institution enjoys the privilege of freely using the accumulated transaction information for commercial purposes, escaping the constraints of personal information protection laws."

She added, "The purpose of amending the EFTA should not and cannot be to 'foster large financial platform operators,'" emphasizing that "regulators should not select technological winners in a competitive and dynamic market."

Jeon Seong-in, Professor of Economics at Hongik University, in his presentation on "Problems and Improvement Directions of the EFTA Amendment," addressed the externalization of internal transactions, stating that "the argument that it is necessary in case of bankruptcy is untenable," and warned that "externalizing internal transactions forcibly accumulates individuals' transaction information at the Korea Financial Telecommunications & Clearings Institute, threatening the stability of the payment network and potentially causing other problems."

He also stressed the need for "business partnerships between comprehensive payment service providers and banks," and said, "When user deposits are held externally, regulations should require that they be deposited in a manner that can be distinguished by each user."

On the other hand, Jang Seong-won, Secretary General of the Korea Fintech Industry Association, who participated in the discussion, emphasized that "digital financial infrastructure is not a vested interest that any particular sector can monopolize, but a national and timely demand to enhance the competitiveness of the financial industry."

He added, "Most services are already technically feasible to implement stably," and expressed hope that "the legal and institutional foundation will be established as soon as possible due to high consumer demand."

Other discussants included Kim Deuk-ui, head of the Financial Justice Solidarity, Secretary General Jang, Kim Bo-rami, member of the Consumer Justice Center at the Citizens' Coalition for Economic Justice, and Jung Joong-ho, director of Hana Financial Management Research Institute, who shared diverse opinions on the implications of the amendment, the necessity of revision, and emerging issues from the perspectives of various stakeholders.

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