Lee Eogweon: "Measures to Improve Card Payment System via PG to Be Prepared Soon"

Lee Eog-weon, Chairman of the Financial Services Commission, Holds Meeting with Credit Finance Industry CEOs
Calls for Stronger Efforts to Protect Consumers

Lee Eog-weon, Financial Services Commission Chairman. Photo by Jo Yongjun

Lee Eog-weon, Chairman of the Financial Services Commission, stated that there are vulnerable links in consumer protection during card payments processed through electronic payment gateway (PG) services, and announced plans to swiftly prepare measures to improve the system.

On the morning of November 20, at the Korea Financial Association in Jung-gu, Seoul, Chairman Lee held a meeting with chief executive officers (CEOs) from credit card and capital companies to discuss ways to strengthen consumer protection and transition toward more productive finance.

During the meeting, Chairman Lee said, "The recent widespread adoption of complex multi-level PG payment structures is due to the card industry neglecting consumer protection and sticking to easy business practices. To enhance the safety and convenience of card transactions, the card industry must take on a responsible role." He explained that as more PG operators sign contracts with lower-tier PG operators and delegate merchant acquisition and management in a multi-level structure, issues such as delayed settlements and illegal transaction brokering have emerged, and card companies also bear responsibility for these problems.

He added, "The government also plans to quickly establish a regulatory framework to protect financial consumers from blind spots arising in complex transaction structures and to enhance payment security in e-commerce, including eliminating regulatory gaps between prepaid/debit electronic payment instruments and card payments."

He also called for measures to prevent the recurrence of recent credit card company hacking incidents. Chairman Lee said, "The recent leak of customer data by credit card companies is a clear example of the industry's complacent attitude toward consumer protection. Please make every effort to strengthen financial security and restore consumer trust."

He continued, "The maturity of the card industry has been largely driven by government policies such as mandatory acceptance, prohibition of price discrimination, and income tax deductions. Card companies must continue to prioritize public values such as mutual growth with merchants and members, and the enhancement of payment stability."

He also urged the capital finance sector to discover new growth engines that improve consumer convenience. Chairman Lee said, "Consumer behavior is rapidly shifting from ownership to experience, and from face-to-face to non-face-to-face transactions. In response, the capital finance sector should consider innovative business models that create new value, such as offering a variety of value-added products related to their core business."

He went on to say, "As the sharing and subscription economy expands, we will actively review institutional improvements, such as easing the limits on rental transactions, which are currently only permitted within the scope of core business performance, to better meet diverse consumer demands."

He also called for a stronger role for the new technology finance sector in the government’s productive finance policy. Chairman Lee said, "The new technology finance sector supplies customized funding to various promising venture companies at each stage of growth, and will play a leading role in fostering long-term growth engines for our economy." He further emphasized, "Founders should not be held excessively liable through joint guarantees, so that they can use failure as a stepping stone for another attempt. Please provide robust protection for both investors and investee companies."

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