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Financial watchdog expected to fine Kakao Pay 15 billion won for sharing user data with Alipay

Published: 09 Apr. 2025, 10:23 Updated: 09 Apr. 2025, 14:19

Kakao Pay logo [KAKAO PAY]

Kakao Pay is expected to face a large fine for sharing the personal data of Korean users with Alipay, according to financial authorities.

The Financial Supervisory Service (FSS) recently held a disciplinary review committee meeting, during which it decided to impose a fine of approximately 15 billion won ($11 million) on Kakao Pay, according to industry sources and financial regulators on Tuesday.

The large penalty reflects the scale of the data breach, which reportedly involved information from about 40 million users. The FSS has also recommended disciplinary action against the company’s CEO, suggesting a formal warning rather than a severe penalty.

The final decision will be made by the Financial Services Commission (FSC), which is expected to review the case and determine the exact amount of the fine and other sanctions as early as the end of this month.

The FSC has the authority to reduce the penalty amount proposed by the FSS. If the fine exceeds 10 billion won, it would mark the largest ever imposed for a violation of financial data regulations. Previously, the largest fine was around 5.3 billion won, issued to Toss for the unauthorized collection and use of personal credit information.

In January, the Personal Information Protection Commission (PIPC) fined Kakao Pay 5.97 billion won for violating Korea’s Personal Information Protection Act. That fine was based on revenue from Kakao Pay’s payment services.

Unlike the PIPC, the FSS applied the Credit Information Protection Act, which allows fines of up to 3 percent of a company’s total revenue. Kakao Pay is also under investigation for violations of the Electronic Financial Transactions Act.

Authorities found that between 2018 and May 2024, Kakao Pay transmitted 54.2 billion items of personal information to an Alipay-affiliated entity based in Singapore. The data included mobile phone numbers, email addresses, account balances and user behavior data such as the number of payments and transfers made in the past week — information that could be used to analyze consumer patterns. Alipay is a subsidiary of Ant Group, China’s largest fintech company.

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.

BY JEONG JIN-HO [[email protected]]