Financial Supervisory Service Chief Meets Big Tech... "Convenience Payment Fee Disclosure Differs from Cost Disclosure" (Comprehensive)

First Meeting with Big Tech and Fintech After Inauguration
Convenience Payment Fee Disclosure Aimed at Market Transparency, Not Regulation
"Different from Cost Disclosure... Considering Consumers Who Don't Know Price Details"

Lee Bok-hyun, Governor of the Financial Supervisory Service, is speaking at a meeting between the Big Tech and Fintech industries held at Prot One in Mapo-gu, Seoul on the 30th. Photo by Moon Ho-nam munonam@

[Asia Economy Reporter Minwoo Lee] Since his inauguration, Lee Bok-hyun, Governor of the Financial Supervisory Service (FSS), held his first meeting with the Big Tech and Fintech industries. Although concerns have been raised across various sectors ahead of the introduction of transparent disclosure of convenience payment fees, he stated that considering consumers who face information asymmetry, it is necessary to secure market transparency. Regarding companies' concerns about revealing proprietary trade secrets, he drew a clear line by emphasizing that fee disclosure is different from cost disclosure.

On the 30th, Governor Lee held a meeting with Big Tech and Fintech industries at Front1 in Mapo-gu, Seoul. This was his first meeting with the Fintech industry since taking office. Attendees included Park Sang-jin, CEO of Naver Financial; Shin Won-geun, CEO of Kakao Pay; Lee Seung-geon, CEO of Viva Republica (Toss); and Lee Geun-ju, Chairman of the Korea Fintech Industry Association.

Governor Lee acknowledged and supported the financial innovation of Big Tech and Fintech while emphasizing ‘responsibility.’ In his opening remarks, he said, "Please continuously verify that the algorithms, which are key to recommending financial products, prioritize consumers' interests over the platform's profits," and added, "I hope financial platforms operate fairly and transparently so that various stakeholders can coexist."

This is interpreted as expressing his intention to promote the ‘Convenience Payment Fee Disclosure System,’ a national agenda of the Yoon Seok-yeol administration. The system aims to improve the fee regulation differences between the card industry and the convenience payment sector based on the principle of ‘same function, same regulation,’ and to reduce the fee burden on small business owners. The FSS has already formed a ‘Payment Fee Disclosure Task Force (TF)’ involving Naver Financial, Kakao Pay, and Viva Republica.

After the meeting, Governor Lee also emphasized to reporters that fee disclosure is necessary for market transparency. He explained, "It is a reality that there are concerns about whether the nature of newly emerging Big Tech contains elements that restrict competition, and whether information asymmetry between consumers and Big Tech causes market distortion," adding, "In advanced countries, such concerns have been resolved not through regulation but by voluntarily disclosing information or securing market transparency, and the FSS intends to approach it from this perspective."

He also drew a line regarding criticisms that fee disclosure infringes on trade secrets by equating it with cost disclosure. Governor Lee stated, "Convenience payment fees are autonomously decided by the industry, and we have no intention of touching the companies' proprietary secrets such as fee costs," but countered, "Fee disclosure is about informing consumers, who do not know the exact price they pay when purchasing goods or services, about how the fees are charged, so considering it as cost disclosure is somewhat excessive."

So far, the industry has expressed concerns that fee disclosure is excessive intervention. This is because the FSS is likely to require not only Big Tech companies like Naver Pay, Kakao Pay, and Toss but also Fintech firms, payment gateway (PG) companies, and online comprehensive shopping malls to disclose their fee cost structures. Delivery services like Baedal Minjok and SSG.com also attended a related meeting held by the FSS in May. Ultimately, Fintech companies argue that applying the same regulations based solely on function, despite different environments from card companies, is unreasonable. They also believe that simple uniform comparative disclosure is inappropriate due to differing cost structures.

The card industry is also concerned about ‘same regulation.’ They argue that while they want regulatory relaxation similar to Fintech, regulating Fintech convenience payment fees to disclose detailed information such as costs, like the card industry's re-estimation of eligible costs, would lead to a ‘leveling down’ that stifles the potential of the entire industry.

Governor Lee said, "I am well aware of the industry's concerns, and fees should be autonomously decided in the market; the supervisory authority has no intention of direct intervention," adding, "We will reasonably prepare by fully gathering the opinions of stakeholders."

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