Gov’t wants better finance-IT ties
PANGYO - Choose a friend on your KakaoTalk list and type in the amount of money you want to transfer to that friend. You are not required to verify your identity through a certificate system or take time to install Active-X before proceeding with the payment.
This new mobile payment service, called Bank Wallet Kakao, will be launched early next month on KakaoTalk, the nation’s most used messenger app for smartphones. Executives of Daum Kakao demonstrated the service in front of financial authority officials including in Shin Je-yoon, chairman of the Financial Services Commission (FSC), at the company’s headquarters in Pangyo, Seongnam, yesterday.
The government has said it will ease regulations that hinder convergence between finance and information technology. To promote efforts to support cooperation, Shin met with executives of IT companies in Pangyo Techno Valley, home to the government’s creative economy initiative.
Daum Kakao is an IT juggernaut created by the recent merger between the nation’s No. 1 mobile messenger application developer, KakaoTalk, and the second-largest portal operator, Daum Corporation. Its new payment service will not require a verification certificate or the installment of Windows-only Active-X security software, a firewall and a vaccine program, which have been considered major hurdles to developing the e-commerce industry.
Through Bank Wallet Kakao, a smartphone user can link his or her bank account information with the app, which will then display the amount of money in the linked account. The company will partner with 14 commercial banks on security.
The maximum amount of money a person can send per day is 100,000 ($93.5) won and the amount received by one person cannot surpass 500,000 won.
“Convergence between finance and IT is an irresistible trend worldwide, especially in the payment sector,” Shin said. “The government will revise existing regulations and restraints that prevent the introduction of such new financial services.”
IT companies like Google and Alibaba are taking over the traditional turf of financial institutions, the chairman noted.
“As economic conditions and consumer needs keep changing, Bank Wallet Kakao is just the very first product of our ongoing development,” said Lee Sirgoo, co-CEO of Daum Kakao.
“Under the new catchphrase ‘IT-finance powerhouse,’ the government will form a joint body with private entities to discuss revisions and improvements to related regulations for convergence of the two fields,” Shin said.
The government has recently eased rules to make online payment more convenient for tech-savvy consumers.
In May, it scrapped mandatory use of the digital verification certificate system for online commercial transactions , and in September, the government banned institutions from requiring a particular method or technology to verify users’ identities.
“The government’s next step is to remove mandatory installment of Active-X and let financial institutions freely select security programs,” Shin said.
Many Korean consumers have complained over Active-X, which takes time to install.
“The success of Bank Wallet Kakao will determine the future of the country’s online payment system,” said Kang Im-ho, a professor of economics at Hanyang University. “It could be a sensation with the general public and a good example of the government’s effort for deregulation.”
BY Song Su-hyun [firstname.lastname@example.org]
with the Korea JoongAng Daily
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