Authorities mull expanding mobile message use by credit card companies

South Korean financial authorities are considering expanding credit card companies’ use of mobile messages. Credit card companies have expressed concerns about being at a disadvantage in preventing financial fraud compared to banks and securities firms, as they are restricted in using mobile messenger-based services such as ‘Alim Talk.’ Unlike text messages, which can be used by anyone, Alim Talk requires scrutiny and authentication via platforms such as KakaoTalk that are more effective in preventing financial fraud.

According to the financial industry on Sunday, financial companies excluding credit card companies, including banks and securities firms, currently send various informational alerts via mobile messengers. In contrast, card companies’ usage of mobile messages such as AlimTalk is less than 5 percent due to a 2019 guideline stating, “the content sent via mobile messages should be trivial, such as card application confirmation notices.”

“We are looking at whether there are any regulatory or legal issues if credit card companies send various informational messages via mobile messages,” an official from the financial authorities said.

There are three main ways for financial institutions to communicate information to customers: app (push) notifications from financial institutions, text messages (SMS) from telecommunications companies, and messages via mobile messengers from tech companies.

A prominent mobile message service is Kakao Alim Talk, a service that sends informational messages via KakaoTalk, a mobile messaging app operated by Kakao Corp. Alim Talk is available only to businesses that have been vetted and authorized by Kakao and prohibits the impersonation of financial companies by designating their names as restricted words.

Kakao’s security technology can filter out harmful elements, such as malicious code embedded in messages, in advance and issues automatic warnings when messages are received from unregistered or overseas users, cautioning against potential financial demands.

With these advantages, banks use Alim Talk to send various types of informational messages, from savings account and fixed deposit sign-ups to retirement pension yield notifications. Credit card companies believe that Alim Talk can be useful for customer protection as it can block fraudulent financial messages, such as “ABC Card opened” from overseas.