Another Postponed Discussion on the Electronic Financial Transaction Act... Year-End Passage Slipping Away

Unable to be submitted to the Political Affairs Committee's Bill Review Subcommittee
Budget review and presidential election among piled-up political schedules

[Image source=Yonhap News]

[Asia Economy Reporter Kiho Sung] Discussions on the amendment to the Electronic Financial Transactions Act (EFTA), which would require platform operators to issue accounts to users, are unlikely to take place during this regular session of the National Assembly. This is due to the continued opposition from the existing financial sector and unresolved conflicts between government ministries. With the presidential election next year and intense disputes between the ruling and opposition parties, it is widely believed that the EFTA will not pass within this year.

According to the National Assembly and political circles on the 17th, the Political Affairs Committee will hold a subcommittee meeting to review various bills. Although it was initially expected that the EFTA amendment would be discussed at this meeting, it was confirmed that it was excluded from the final agenda.

The Political Affairs Committee plans to hold another subcommittee meeting on the 23rd. However, it is anticipated that the EFTA will not be reviewed during this regular session. A committee official stated, "The subcommittee meeting on the 23rd is scheduled to additionally review bills that were submitted on the 17th but not yet discussed," adding, "It is difficult to discuss the related law during this regular session."

The ruling party had initially planned to discuss both the amendment proposed by Democratic Party lawmaker Gwansuk Yoon and the recently submitted bill by Democratic Party lawmaker Byungwook Kim together during this session. However, it is reported that the ruling and opposition party floor leaders failed to reach an agreement on the bill’s submission.

The opposition party insists that the ruling party must first organize the related bills. An opposition member of the Political Affairs Committee said, "Although there have been reports that the Bank of Korea and the Financial Services Commission have reached some agreement, the details have not been concretely communicated to the National Assembly," adding, "The lack of consensus within the industry is problematic, but rushing the National Assembly discussions without the government and ruling party organizing the bills could lead to further conflicts."

Industry opposition to the EFTA remains a concern. If the EFTA passes, big tech companies will become comprehensive payment service providers, allowing them to offer and manage accounts for consumers. The existing financial sector strongly opposes this.

The recently proposed bill by lawmaker Byungwook Kim includes the establishment of a ‘Digital Finance Council’ to mediate this issue, but the existing financial sector finds this difficult to accept. This provision was introduced to appease traditional financial companies opposing the EFTA as a ‘Naver special law,’ requiring big tech companies to undergo review by the Digital Finance Council when implementing the comprehensive payment service system. Although the participants have not yet been finalized, the Digital Finance Council is expected to include the Financial Services Commission, financial companies, and big tech firms.

A representative from the National Financial Industry Labor Union stated, "The union continuously opposes the introduction of comprehensive payment services and insists on the principle of ‘same work, same regulation,’" adding, "If the Digital Finance Council is introduced, there is a possibility that responsibility will be further dispersed."

For these reasons, it is expected that the EFTA will effectively be delayed beyond this year. A financial sector official said, "For the EFTA to pass, the stakeholders’ positions need to be somewhat reconciled, but the current situation is difficult," adding, "With the National Assembly’s budget review approaching and the presidential election season following soon after, the EFTA’s passage will likely occur after the election."

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