KakaoPay and Toss Certificates Surpass 20 Million Issued
Major Banks Shun Them Over 'Security Incident Liability' Concerns
[Asia Economy Reporter Kim Hyo-jin] Although the public certification system was abolished on the 10th and a new authentication market opened, the atmosphere has not yet led to an expansion of choice for financial consumers.
In particular, while some big tech companies' authentication certificates have rapidly increased users and formed a foundation for universal use, banks with high authentication demand are reluctant to adopt them due to concerns about customer attrition, leading to the formation of 'their own leagues,' critics say.
According to the banking and IT industries on the 28th, among the five major commercial banks?KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup?none have adopted KakaoPay or Toss authentication certificates.
KakaoPay and Toss authentication certificates are currently leading the non-bank authentication market, with cumulative issuances exceeding 20 million.
SC First Bank is the only commercial bank that has adopted these certificates. The five major banks mainly conduct transactions using their own certificates and financial certificates jointly developed with the Korea Financial Telecommunications & Clearings Institute. Some banks have adopted or are considering adopting the PASS authentication certificate from the three major telecom companies.
KakaoPay and others have continuously sought partnerships with major banks even before the abolition of the public certification system, but banks have expressed reluctance citing issues such as responsibility for security incidents.
A bank official said, "Unlike the old public certification, private external authentication certificates require the adopting bank to take full responsibility in case of incidents," adding, "It seems that more time is needed to alleviate these concerns based on security verification."
Another bank official bluntly stated, "There are no plans to consider adoption for the time being."
'Negative' Views Due to Concerns Over Customer Attrition
However, some analysts argue that banks are negative about partnerships because they are conscious of future competition with big tech companies.
In the case of KakaoPay, it is connected to KakaoBank, which is rapidly expanding in the loan sector, and Toss is also seeking synergy with Toss Bank, which will launch next year, so banks cannot help but be cautious.
An IT industry official explained, "The general evaluation is that both big tech authentication certificates and those developed by banks have better security and convenience than the old public certification," adding, "The fact that financial companies other than banks are adopting big tech certificates one after another is proof of this evaluation."
Currently, KakaoPay and Toss have authentication business partnerships with SC First Bank and many financial companies such as securities and insurance firms. KakaoPay has about 200 partner institutions.
A financial sector official said, "The government's and financial authorities' intention in abolishing the public certification system and fostering the private authentication market is to provide consumers with more choices based on market competition," adding, "If the current trend continues, each player might just divide the market among themselves."
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