On May 24, 2024, the Financial Services Commission (the “FSC”) pre-announced a proposed amendment to the Enforcement Decree of the Electronic Financial Transactions Act (“EFTA-ED”). This proposed amendment (the “Proposed Amendment”) set forth the details mandated by the amended EFTA (which was amended on September 14, 2023 and will take effect on September 15, 2024, by Act No. 19734).
In an effort to prevent a future “Mergepoint” scandal, the EFTA has been amended to (i) expand the scope of business entities that may issue and manage prepaid electronic payment means (“Prepayment Service Providers”), thereby remediating existing regulatory blind spots, (ii) set out certain requirements to separately manage funds pre-charged by users, and (iii) formally incorporate the postpaid micropayment service, which had been classified as an innovative financial service, into the EFTA.
In line with the amended EFTA, the Proposed Amendment specifies (i) the expanded scope of regulations for prepaid electronic payment means, (ii) to what extent and how funds pre-charged by users must be separately managed, (iii) a code of conduct for Prepayment Service Providers, and (iv) requirements for and restrictions on the approval of a postpaid micropayment service provider.
For more information, please refer to our memo discussing the key contents of the Proposed Amendment and the consequent implications.
