Kakao Pay Referred to Prosecution... 'Allegations of Paying Franchise Recruitment Costs'

Seoul Metropolitan Police Agency, KakaoPay, and Others Referred to Prosecution Without Detention
NICE Information & Telecommunication Suspected of Paying Franchise Fees on Behalf

The police have referred Kakao Pay and personnel in charge of merchant contract operations to the prosecution on charges of shifting the cost of recruiting franchise stores to a consignment company.

According to the police on the 16th, the Anti-Corruption and Public Crime Investigation Unit of the Seoul Metropolitan Police Agency sent Kakao Pay and officials from NICE Information & Telecommunication, who are suspected of violating the Specialized Credit Finance Business Act, to the prosecution without detention the day before.

The police applied charges of violating the Specialized Credit Finance Business Act after determining that NICE Information & Telecommunication paid part of the recruitment costs that Kakao Pay was supposed to bear.

According to the police and the IT industry, typically, the company requesting offline franchise recruitment pays the promotion costs for recruiting franchise stores to the VAN company. The VAN company then passes the funds received to the VAN agency that actually carries out the recruitment work, creating a structure to increase the number of franchise stores. VAN refers to a consignment company that intermediates credit card transactions between card companies and franchise stores, including transaction inquiry and approval, and sales slip acquisition services.

Earlier, in July, the police conducted a search and seizure at the Kakao Pay headquarters in Bundang-gu, Seongnam-si, Gyeonggi Province, and the NICE Information & Telecommunication office in Yeongdeungpo-gu, securing materials related to payment service franchise recruitment and management.