Kakao Bank shares drop over 10 percent after news of potential payment system reforms

Kakao Bank's office in Yeouido, Seoul. [NEWS1]

Shares of Kakao Bank, Korea’s leading online bank, dropped more than 10 percent the moment the market opened Friday, following news the previous day that easy mobile payment based on prepaid accounts will be banned.

An article published by the Electronic Times on Thursday, reported that the Financial Services Commission was working on a reform bill on the Electronic Financial Transaction Act that will ban prepaid-based payment systems and limit payment systems to money transfers between accounts.

The article argued that this reform bill has the potential to become a major regulatory shackle and once passed, many consumers won’t be able to use Kakao’s easy mobile wiring through its messenger app Kakao Talk.

The FSC, while acknowledging that it is working on a reform bill, argued that even if the changes are implemented consumers will still be able to use the easy mobile wiring system.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]