Financial Authorities Accept Request to Improve Regulation on Naver Pay Small Postpaid Payments

The financial authorities have accepted the regulatory improvement request related to Naver Financial's small-amount postpaid payment service.

On the afternoon of the 15th, the Financial Services Commission held a regular meeting and announced that it accepted one regulatory improvement request related to innovative financial services and decided to terminate the designation period for four innovative financial services.

Naver Financial's small-amount postpaid payment service allows consumers to purchase goods using Naver Pay points (prepaid electronic payment means) and repay the payment shortfall (the difference between the prepaid electronic payment balance and the payment amount) later as a postpaid payment service.

The authorities had granted an exception allowing issuers and managers of prepaid electronic payment means to provide postpaid payment services within a monthly limit of 300,000 KRW per individual, process resident registration numbers during the service provision, and ensure that the service does not fall under unauthorized credit card business under the Credit Finance Business Act.

Naver Financial requested the authorities to improve related regulations to continue providing the service even after the expiration of the innovative financial service designation period. The authorities decided to accept the regulatory improvement request as the amendment to the Electronic Financial Transactions Act in September established the basis for prepaid operators to concurrently operate small-amount postpaid payment businesses, and the revision of subordinate regulations such as enforcement ordinances is currently underway.

Accordingly, Naver Financial will be able to continue providing this innovative financial service until the amendment to the Electronic Financial Transactions Act is enforced (September next year) and the related laws such as enforcement ordinances are revised (up to 1 year and 6 months).

This measure may also apply to companies such as Kakao Pay and Viva Republica, which have been designated innovative financial services and provide small-amount postpaid payment services similar to Naver Financial, if they request regulatory improvements.

An official from the authorities explained, "If companies like Kakao Pay and Viva Republica also have their regulatory improvement requests accepted before the expiration of their designation period, they can continue to provide services during the period of legal revisions. Furthermore, once the related legal revisions are completed, they can equally enjoy the effects of regulatory improvements."

Meanwhile, the authorities decided to terminate the designation period for the innovative financial service ‘Visible TM Insurance Subscription Service’ designated to Kyobo Life Insurance, LINA Life Insurance, Meritz Fire & Marine Insurance, and Hyundai Marine & Fire Insurance. This is because, following the completion of amendments to related laws such as the Enforcement Decree of the Insurance Business Act in June, the service can be provided without the regulatory exceptions granted at the time of designation.

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