The Financial Services Commission (FSC) announced on August 9 that it has decided to allow securities companies to engage in the payment gateway (PG) business, a move that paves the way for them to provide mobile simple payment services and work with foreign fintech companies, including Alipay.
In order to establish a partnership with foreign fintech companies, including simple payment services providers, PG operators are required to be designated as financial firms. However, current PG operators in South Korea are not financial companies. In particular, Chinese fintech firms, such as Alipay and WeChat Pay, can enter a partnership only with foreign financial companies under the current regulations in China.
When securities companies are allowed to run the PG business, Chinese tourists will have easier access to simple payment services, including Alipay. The FSC expects this would increase Chinese tourists’ spending in Korea.
The FSC will also revise regulations on the investment banking business and allow securities companies to add short message services and app notification services to their means of transaction notification.
In addition, it has decided to include foreign government bonds in the bonds for repurchase agreements (RP). It is intended to improve the rate of returns of investors by offering the tool that is useful to operate short-term foreign money at call, according to the FSC.
Securities companies are also expected to be allowed to directly sell stock warrants acquired in return for an initial public offering (IPO) through the investment banking (IB) division instead of transferring them to the inherent property operation division. This is a measure for the business continuity of the IB division and the authoritative interpretation is in progress.
The FSC will complete the authoritative interpretation and make the revised bill for related legislations by the end of this month and start the process of revision next month. It is also planning to hold meetings with asset management companies on the 22nd to listen to proposals and improve regulations to build a regular regulatory system.