With the National Assembly likely to pass revisions to the Electronic Signature Act on Wednesday, fintech groups and mobile carriers are projected to dominate the related market with their existing online identification services.

The revision bill -- likely to be among a set of legislations that the 20th National Assembly will pass at its last plenary meeting –- is projected to fuel privatization of the e-signature industry by abolishing the nation’s public e-certificate system, also known as the accredited certificate of authentication.

The accredited certificate, which has been used here widely for more than two decades, has been often criticized for its complicated and grueling application and issuance process. On top of it, foreign residents here were not eligible for application and the certificate had one-year expiration date, which required users to repeat the same issuance process every year.

With the abolishment of the public certificate, its users are expected to flock to private e-signature systems operated or developed by local fintech firms. Fintech firms wield the power and technology, such as blockchain technology to bolster the systems’ security.

Kakao Pay, mobile payment services unit of Korean IT giant Kakao, launched its own e-certification service in 2017 and has already garnered more than 10 million users as of early May.

Like the public certificate system, it uses the framework of public key infrastructure which utilizes encryption and cybersecurity that protects communication between the server and the client. But the security was further bolstered through blockchain technology.

The application and issuance process is also carried out through Kakao’s mobile messenger app Kakao Talk for convenience.

Pass, an identity verification service and mobile app offered to users of all major mobile carriers -- SK Telecom, KT and LG Uplus –- also launched its verification system last year.

Companies such as KT and Mirae Asset have adopted it for their official verification system since.

The system allows users to have their identity verified by fingerprint or iris or by inputting a six-digit password instead of filing in extensive personal information.

Its technology developed by Aton, a local security company specializing in fintech, a sign that the abolishment of the public certification system will open more opportunities for small and medium-sized fintech firms that can participate as developers.

Traditional lenders have their own joint e-verification system as well, which follows the footsteps of the public system, but boasts an expiration date of three years.

By Jung Min-kyung (mkjung@heraldcorp.com)