[2021 National Audit] Prepaid Recharge Amount 1.6 Trillion Won... "Regulatory Gaps Despite Merge Incident"

"The Financial Supervisory Service Must Assess Operational Appropriateness"

[Image source=Yonhap News]

[Asia Economy Reporter Jeon Jinyoung] Amid concerns over the management of user deposits by prepaid companies following the Merge Point incident, Song Jae-ho, a member of the National Assembly's Political Affairs Committee from the Democratic Party of Korea, pointed out on the 21st that "although the scale of prepaid recharge funds exceeded 1.6 trillion won, regulations remain insufficient."

According to data submitted by the Financial Supervisory Service to Representative Song on the same day, the scale of prepaid recharge funds for 52 registered prepaid operators was 1.6 trillion won as of March this year. However, Starbucks was excluded from this survey as it is not classified as a prepaid operator.

The company with the largest amount of prepaid recharge funds was Kakao Pay with 321.18 billion won (19%), followed by Kona I with 269.757 billion won (16%), Hi-Pass Card with 246.266 billion won (14.6%), T-money with 201.112 billion won (12%), and Toss with 121.118 billion won (7%).

Currently, only 26 out of the 52 prepaid operators have remittance functions. According to the user protection guidelines established last year, companies capable of remittance must subscribe to trust or guarantee insurance at 100%, while non-remittance companies must do so at 50%. However, there is criticism that the current guidelines are merely recommendations and lack enforceability.

Representative Song pointed out, "There are limitations in user protection, and due to the absence of regulations on the financial soundness of prepaid operators, interest income generated from user recharge funds is used as private financing by companies."

He added, "Following the Merge Point incident, the soundness of prepaid operators is necessary to prevent financial accidents or user damages. Since the scale of prepaid recharge funds reaches 1.6 trillion won, the Financial Supervisory Service should assess the appropriateness of their management."

He also emphasized, "There are no legal regulations on prepaid recharge funds, so it is impossible to know the interest or management status when these funds are deposited externally. Since companies can misuse them as private funds or petty cash, public discussion on interest income is necessary."