Fintech Industry Accelerates Regulatory Changes to Strengthen Electronic Financial Soundness

As consumer damage caused by a series of recent electronic financial incidents continues to spread, the government and the fintech industry are actively moving to improve regulations aimed at enhancing the management stability and restoring trust in electronic financial services.

The government has submitted a revision to the Electronic Financial Transactions Act to the National Assembly, which requires prepaid payment providers to entrust at least 50% of their stored funds, and payment gateway (PG) companies to entrust all of their settlement funds, to external financial institutions. In addition, the government plans to significantly strengthen registration requirements for prepaid payment and PG businesses in order to block indiscriminate market entry and promote sound management practices.

According to the revised bill, to register as a prepaid payment provider, companies must meet requirements such as: ▲ a minimum capital of 2 billion won, ▲ a debt ratio of 200% or less, and ▲ establishment of their own IT system. For PG business registration, companies must satisfy multiple conditions, including: ▲ a minimum capital of 300 million won, and ▲ securing development personnel and security systems.

In response to these changes, the industry is working to meet the new requirements through collaboration with trust companies or by seeking professional consulting. One PG company is currently proceeding with the registration process for prepaid payment business in cooperation with Olinefo Co., Ltd.

Some have criticized the strengthened regulations as excessively strict; however, experts view these measures as essential for eliminating unlicensed operators and improving market structure. In particular, utilizing professional consulting to develop registration strategies is expected to become a key factor for survival in the market as the regulatory environment changes.

The fintech industry plans to use the stricter standards as an opportunity to secure competitiveness by expanding into overseas payment markets and differentiating their services.