South Korea's Financial Services Commission decided on amendments to the Electronic Financial Supervision Regulations at its 13th regular meeting on the 15th, requiring electronic payment operators and financial companies to provide detailed payment fee disclosures when signing or renewing contracts with merchants. The new rules mandate one-month advance notice when fee standards change unfavorably for merchants. The amendments follow up on the payment fee disclosure expansion and payment gateway regulation strengthening measures announced in October, addressing the previous gap where disclosure obligations specified method but not content or timing.
Financial Companies Must Separately Disclose Payment Fees at Contract Events
Under the amended regulations, financial companies and electronic payment operators must separately identify and disclose "payment fees" when notifying merchants of fees. Disclosure is required at contract signing, contract renewal, and whenever payment fee standards change. When fee standards change unfavorably for merchants, operators must provide notice one month before the change date. The disclosure requirements apply to contracts signed or renewed through sales agents.
The FSC stated the regulatory improvement will enable small business owners and other merchants to compare and select electronic payment operators based on more specific fee information, with expectations that market competition will reduce fee burdens.
FSC Introduces Risk Assessment Obligations for Multi-Tier PG Structures
The FSC incorporated risk assessment obligations for prepaid operators and upper-tier payment gateway operators regarding lower-tier PG operators into the supervision regulations to reduce risks from multi-tier PG payment structures. Prepaid operators and upper-tier PG operators must evaluate financial soundness and illegal activity risks when signing or renewing contracts with lower-tier PG operators, as well as periodically during the contract period.
Operators must take measures including contract non-execution, contract extension refusal, corrective demands, or contract termination against lower-tier PG operators assessed as high-risk. Assessment results must be retained for five years.
Amendments Take Effect Immediately with October Implementation for PG Rules
The Electronic Financial Supervision Regulations amendments take effect immediately after the FSC decision. The risk assessment obligations for PG operators will be implemented from October 1, considering industry preparation time.
FAQ
What did South Korea's FSC decide on the 15th regarding payment fees?
The FSC decided on amendments to the Electronic Financial Supervision Regulations at its 13th regular meeting on the 15th, requiring electronic payment operators and financial companies to separately disclose payment fees at contract signing, renewal, and when fee standards change, with one-month advance notice required for unfavorable changes.
When do the new PG risk assessment obligations take effect?
The risk assessment obligations for prepaid operators and upper-tier PG operators regarding lower-tier PG operators will be implemented from October 1, while the other amendments to the Electronic Financial Supervision Regulations take effect immediately after the FSC decision.
