Financial Supervisory Service Gov. Jeong Eun-bo (Yonhap)
South Korea’s financial watchdog will launch an investigation into electronic payment service providers and their operations amid growing concerns over consumer protection in a row involving local discount app operator Mergeplus.
The Financial Supervisory Service has been under fire for failing to monitor risks and eliminate legal gray areas on the back of fast-growing electronic payment services in recent months.
Angry customers swarmed Mergeplus’ headquarters in Seoul last week after it announced it would reduce the benefits it offered, citing legal procedures stemming from its change from a gift card provider to an electronic financial service provider.
“We plan to inspect all 65 of the registered electronic payment service providers to see whether they are complying with consumer protection guidelines,” the FSS said in a statement.
The FSS will also inspect companies that provide electronic payment services via gift cards or cash points, such as Mergeplus.
Industry players are paying keen attention to the issue, especially to whether the scandal could speed up the implementation of a bill amending a law on electronic financial transactions. The revised law requires service providers to take out insurance to protect consumers by allowing them to be reimbursed first if the companies go bankrupt.
By Byun Hye-jin (email@example.com