KakaoPay, South Korea’s popular payment platform, has witnessed an astonishing 14-fold increase in transactions made by foreign tourists within a year. (Image courtesy of Yonhap)
SEOUL, Aug. 13 (Korea Bizwire) — Kakaopay Corp. has provided credit information of its users to China’s Alipay without the required customer consent, the financial regulator said Tuesday, an allegation quickly dismissed by the South Korean platform.
The Financial Supervisory Service (FSS) said its inspection of South Korea’s leading mobile payment platform in April and May for foreign currency transactions showed the company has provided personal credit information of its customers to the Chinese firm, which is also Kakaopay’s second-largest shareholder.
The FSS says the country’s Credit Information Use and Protection Act requires any business to secure customer approval before providing their personal credit information to a third party, and that since Alipay is a foreign company, the suspected provision of such information required additional and separate customer consent for overseas relocation of their information.
Kakaopay argued there had been no “illegal provision of information,” saying that only the limited information needed for mobile payments had been moved to the Chinese firm under a consignment contract between the two payment platforms and Apple Inc., which it claimed did not require customer approval.
The company also said the information provided to Alipay had been encrypted, leaving the Chinese firm unable to identify users or use the provided information for any other purposes than the intended detection of illegal payments.
(Yonhap)
