“Remote credit card issuance to become easier” ... FSC designates four new innovative financial services

[Financial News] The Financial Services Commission decided at its regular meeting on the 21st to designate four new innovative financial services and accept one request for regulatory improvement. The decision brings the total number of designated innovative financial services to 1,168.
The newly designated services are: Shinhan Card’s deposit-based remote credit card issuance service, which uses prepaid electronic payment instruments; Woori Card Co., Ltd.’s deposit-based credit card issuance service for foreign customers; Banksalad’s “MyData-powered proxy service for checking low-interest loan offers”; and Moin’s “anonymous prepaid electronic payment instrument service for foreign visitors to Korea.”
The deposit-based remote credit card issuance services offered by Shinhan Card and Woori Card Co., Ltd. are aimed at customers with limited financial transaction histories or foreign customers residing in Korea. Customers can apply for a card through an online platform and receive one after paying a deposit using the transfer function of a prepaid electronic payment instrument. Previously, they had to visit a bank branch and go through complex procedures, such as establishing a pledge over a deposit. The new service simplifies the process by allowing it to be completed remotely. Designated companies must keep deposits received separate from their own assets and limit eligibility to people whose limited financial histories make it difficult to verify their personal credit scores.
Banksalad is launching a MyData-powered proxy service for checking low-interest loan offers. After users delegate to the service the task of checking loan product terms, it can apply on their behalf for preliminary loan screening when there is a positive change, such as an increase in their credit score or income, then check the result and notify them. Users can review the loan terms retrieved automatically and access the financial institution directly to take out a loan. Designated companies must obtain clear consent for the delegation and prevent excessive inquiries from causing delays in screening or resulting in rejection.
Moin’s anonymous prepaid electronic payment instrument service for foreign visitors to Korea allows visitors to obtain an anonymous prepaid electronic payment instrument through a mobile app or web service and use it to pay at affiliated merchants. Up to 1 million won can be issued after identity verification. If identity verification is not conducted by an identity verification agency, verification must be strengthened through methods such as optical character recognition (OCR), NFC, and real-time facial authentication.
Meanwhile, a request for regulatory improvement concerning NAVER Financial and Hana Bank’s “Pay Money Account Service” was also accepted. The service holds NAVER Pay users’ prepaid funds in accounts affiliated with Hana Bank, with funds automatically added when users make a payment. Amendments to laws concerning registration requirements for businesses that sell or act as agents or brokers for deposit-type products are expected to be pursued.
[email protected] Park Moon-soo Reporter