Kakao Pay "Complying with All Related Requirements... Will Address Any Shortcomings"

Financial Authorities' Corrective Demands and Related Statement
"Currently Acquiring License and Complying with Regulations"

[Asia Economy Reporter Seong Giho] In response to the financial authorities' judgment that financial platform companies selling financial products such as insurance and funds through their own applications (apps) violate the Financial Consumer Protection Act, Kakao Pay stated that it is providing financial services in compliance with institutional requirements. Essentially, the company plans to maintain its current services as they are.

On the 8th, Kakao Pay explained in a statement, "Fund investments made within the Kakao Pay app are provided by Kakao Pay Securities, a securities company, based on the relevant licenses," adding, "All screens related to product selection and explanation, as well as fund investment inquiry screens, are provided by Kakao Pay Securities' servers and are managed and operated by Kakao Pay Securities."

It further emphasized, "Deposits of investment funds, such as the 'Coin Collecting' feature that automatically invests the remaining amount after payment into a user-designated fund, are transferred from Kakao Pay Securities accounts, not from Kakao Pay Money, which is prepaid charging money."

Kakao Pay also stated that the insurance services within the app are operated by KP Insurance Services (formerly Inbyu), a subsidiary engaged in financial product sales agency and brokerage business, in accordance with relevant laws. It explained that the introduction of insurance products displayed on the Kakao Pay app, insurance premium inquiries, and subscriptions are directly conducted by the insurance agency KP Insurance Services or the respective insurance companies.

Regarding loans, Kakao Pay explained that the ‘My Loan Limit’ service has been provided since June last year after being designated as an innovative financial service provider. It also emphasized that it applied for a sales agency brokerage license (online recruitment corporation) in July in preparation for the full enforcement of the Financial Consumer Protection Act on the 24th, and that related procedures are currently underway.

Kakao Pay stated, "We have focused on resolving the inconveniences of existing financial services and creating an environment where consumers can use services more conveniently and safely," adding, "We will actively review and reflect any additional improvements from the consumer protection perspective in line with the recent announcement by the Financial Services Commission."

The Financial Services Commission and the Financial Supervisory Service recently announced that they have judged some online financial platforms' services as unregistered brokerage activities, requested corrections, and notified the related industry. The Financial Consumer Protection Act, which came into effect in March, requires registration or licensing when directly selling financial products or acting as a sales agent, broker, or advisor. This has caused controversy over whether fintech companies' financial services constitute brokerage. In particular, financial authorities have taken issue with linked investment services provided in partnership with online investment-linked finance companies. They judged that the part where pressing the ‘Invest’ button leads directly to a contract is closer to brokerage than advertising.

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