Financial watchdog inspects Naver Pay, Toss overseas payments

[Photo by Yonhap]

The Financial Supervisory Service (FSS) is looking into major Korean mobile payment companies Naver Pay and Toss to determine whether they have lawfully provided customer credit information to third parties, including overseas entities.

This scrutiny comes after a recent inspection by the South Korean financial watchdog uncovered that Kakao Pay, a mobile payment and digital wallet service unit under the country’s tech giant Kakao Corp., provided customer credit information to Alipay, a Chinese overseas payment processing company, without customer consent.

The FSS said on Sunday that it initiated a written investigation into whether Naver Pay and Toss have provided their customer credit information to third parties in handling overseas payment gateway (PG) services without obtaining customer consent.

“We are examining the two companies’ overseas payment processing procedures to determine whether they improperly shared their customer information,” an FSS official said. “Depending on the findings from this written investigation, we may conduct additional on-site inspections.”

The FSS is considering the possibility that Korean mobile payment service providers may have inappropriately transferred their customer information to third parties, as well as their overseas payment processors, using various other channels during the overseas payment process.

Customers are currently required to agree to various types of terms and conditions when signing up for mobile payment services, and they often unintentionally agree to both the “mandatory” and “optional” information-sharing clauses without carefully reading them.

The financial watchdog’s focus on examining the process of customer information sharing in mobile payments stems from this concern. Once the results from the latest investigation are available, the FSS is reportedly planning to expand its inspection to include other mobile payment companies.