The Financial Services Commission announced on December 16 that it had promulgated an amendment to the Electronic Financial Transactions Act to establish measures for the protection, management, and supervision of settlement funds held by payment gateway (PG) service providers.
This amendment mandates that PG service providers must keep all settlement funds held for merchant settlements and user refunds under external management.
The amendment also raises capital requirements in proportion to the scale of PG business transactions and introduces new obligations for major shareholder change approval and registration to prevent unqualified PG companies from entering the market.
It also establishes a legal basis for taking step-by-step actions such as corrective orders, business suspension, or registration cancellation if PG service providers or other electronic financial service providers fail to comply with management guidance standards. Additionally, it requires the disclosure of information necessary for user protection.
The Financial Services Commission plans to hold information sessions with the Financial Supervisory Service and distribute promotional videos to help the industry understand and smoothly comply with the new regulations.
An official from the Financial Services Commission stated, "Starting in January next year, we will continue to support compliance with the regulations by providing detailed guidance on the calculation and external management of settlement funds through the PG service provider settlement fund external management guidelines."
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