MyData Final Approval This Week... KakaoPay at a Crossroads

PBOC's Ambiguous Response
Service Suspension Risk if Rejected

Ryu Young-jun, CEO of Kakao Pay. / Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Kiho Sung] Financial authorities will conduct the final approval review this week for 28 companies that received preliminary permits for Personal Credit Information Management Services (MyData). In particular, attention is focused on whether KakaoPay, which was disqualified in the preliminary review due to missing documents, can pass the final review. If KakaoPay fails again, consumer confusion for about a month is inevitable.

According to the financial industry on the 25th, the Financial Services Commission will begin the MyData final approval review at the regular meeting on the 27th. It is expected that most of the 28 companies that received preliminary permits, except for some insufficient ones, will receive final approval.

This final review is drawing attention to whether KakaoPay, which requires verification of the “foreign major shareholder’s eligibility,” can obtain approval. KakaoPay, which applied for the MyData preliminary permit review in December last year, was put on hold due to incomplete document submission related to Alipay Singapore Holdings, the second-largest shareholder (43.9%). This is because the financial authorities could not verify the eligibility of Ant Financial, the parent company of Alipay Singapore Holdings in China. According to the Credit Information Act supervisory regulations, if the parent company holding more than 10% of the shares of the applying company is sanctioned by authorities or involved in litigation, the review is suspended. The Chinese government announced the suspension of Ant Financial’s listing in October last year.

The Financial Supervisory Service recently received a response from the People’s Bank of China, the Chinese supervisory authority, regarding whether Ant Financial had been sanctioned, but the reply was ambiguous in email format, and consultations with the Financial Services Commission are ongoing.

Even if KakaoPay does not pass the final review on the 27th, it is possible to hold a temporary meeting and receive approval by supplementing the documents before the 4th of next month.

However, if approval is not obtained by the 4th, the situation becomes complicated. KakaoPay must immediately stop providing similar MyData services under the revised Credit Information Act starting from the 5th of next month. Since it must undergo another review at the final approval meeting held in February, a service gap of about a month is expected.

MyData is a service that collects and manages an individual’s credit information scattered across various financial companies and institutions in one place. If KakaoPay fails the review, services such as integrated transaction inquiry, insurance inquiry, vehicle management, and financial reports are expected to be suspended.

A KakaoPay official said, “We have already submitted all the documents required by the Financial Services Commission,” and added, “The interpretation of the major shareholder eligibility response sent from China is a decision for the financial authorities, so we are waiting for the result.”