[News Today] “KAKAOPAY GAVE USER INFO TO ALIPAY”

[LEAD]
The Financial Supervisory Service reports that Kakaopay transferred over fifty billion customer records to Alipay, a Chinese payment firm, without consent. Kakaopay maintains this was a legitimate step necessary for online payments.

[REPORT]
Customers buying goods on AliExpress, China's largest e-commerce platform, can pay using Kakaopay.

This is because the two firms have inked a deal allowing the use of Kakaopay at some 81 million overseas affiliated stores that share a contract with Alipay, such as AliExpress and Temu.

The Financial Supervisory Service has unveiled that during this process, Kakaopay provided its users' personal information to Alipay without customer consent.

Some 54.2 billion cases of data of over 40 million people are believed to have been handed to the Chinese company since April 2018.

Information include users' encrypted Kakao account ID, cellphone numbers as well as records on the use of Kakaopay money and transaction details of registered credit cards.

The financial regulator raised issue with the lack of consent and the transfer of unnecessary info such as those belonging to customers who made no overseas payment.

Kakaopay has squarely denied the allegation.

It said that it only handed over essential information needed for payments in line with a consignment contract signed with Alipay.

The firm added that in this case, customer approval is not required by law.

It also said the provided info is strictly encrypted and can only be used in identifying illegal payments.

Prof. Kim Myung-joo / Seoul Women's Univ.
Consent is required to pass personal info to overseas locations. Another issue is if it's the bare minimum required for payment or if it went beyond that.

The Financial Supervisory Service will carry out a legal review to implement a sanctions procedure and also look into whether there are similar cases across the sector.

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