[Exclusive] Financial Services Commission Cracks Down on Simple Payment Fees... Disclosure Threshold Lowered from 100 Billion to 20 Billion Won

Financial Services Commission Moves to Overhaul Opaque Commission System
Tightening Disclosure Rules and Urging Voluntary Fee Reductions

The Financial Services Commission is significantly tightening disclosure requirements for simple payment service providers, such as Baemin (Baedal Minjok), Naver Financial, Kakao Pay, and Toss, while also encouraging voluntary adjustment of their commission rates. This move comes in response to ongoing criticism that commission rates charged by simple payment providers are up to seven times higher than the preferential rates offered by credit card companies. By strengthening disclosure regulations, the commission aims to induce providers to voluntarily lower their fees. The regulatory overhaul is also seen as a response to criticism that simple payment service providers have not properly disclosed information to consumers and have been charging fees in an opaque manner.

On the morning of June 19, the Financial Services Commission reported to the National Policy Planning Committee that it will implement reforms to the payment agency system, including expanding commission disclosure and improving the multi-tiered payment agency structure, in order to induce a reduction in payment agency commission burdens. The commission plans to announce these reforms by the end of this year.

First, the Financial Services Commission will significantly expand the scope of simple payment providers required to disclose their commission rates, lowering the threshold from those with an average monthly transaction volume of at least 100 billion won to those with at least 20 billion won. Once the new policy is announced at the end of this year, the number of providers required to disclose their commission rates for the second half of the year will increase by eight.

Previously, in January, the commission expanded the disclosure requirement to 11 providers with an average monthly transaction volume of at least 100 billion won, which brought Toss Payments and KG Inicis into the scope of mandatory disclosure. However, as criticism persisted that simple payment providers’ commission rates remained excessively high, the commission decided to further strengthen disclosure regulations in the second half of the year.

The commission will also increase the number of disclosure items. Until now, only the total payment commission was disclosed. Going forward, providers will be required to separately disclose online and offline commission rates, as well as fees from external payments and in-house revenue. This means that providers must break down and disclose the commission rates collected from merchants and the fees charged to consumers through delivery applications such as Baemin. As the scope of consumer-facing disclosures expands significantly, it will become increasingly difficult for simple payment providers to substantially raise their commission rates.

In addition to expanding the scope of disclosure, the commission will also introduce reforms to the multi-tiered payment agency structure. Upper-tier electronic payment gateway (PG) companies will be required to conduct mandatory soundness and risk assessments of their lower-tier PG partners. This measure is intended to tighten soundness management and prevent financial incidents like the payment crisis involving Tmon and Wemakeprice (Tmap) that occurred last year.