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Photo courtesy of Yonhap News |
[Alpha Biz= Kim Jisun] South Korea’s financial regulator has imposed heavy penalties on Kakao Pay for unlawfully providing personal credit information of millions of users to China’s Alipay without customer consent.
According to financial authorities on Thursday, the Financial Supervisory Service (FSS) issued an “institutional warning” against Kakao Pay and imposed a fine of KRW 12.976 billion, along with an additional KRW 4.8 million in administrative penalties. Two executives received warnings, while three employees were disciplined with pay cuts or reprimands.
The FSS investigation found that from August 27, 2018, to May 21, 2024, Kakao Pay provided Alipay with a total of 54.2 billion data records involving personal credit information of approximately 40.45 million individuals, without obtaining user consent. The shared data included payment histories and transaction details related to Kakao Pay Money used at merchants, effectively disclosing electronic financial transaction records.
Regulators said Kakao Pay failed to implement adequate internal controls and compliance checks, even after appointing a credit information protection officer in October 2020. More than 40.9 billion data transfers occurred after that appointment, underscoring what the FSS described as systemic management failures.
The case follows earlier sanctions by the Personal Information Protection Commission, which in January last year imposed a KRW 5.968 billion fine and issued corrective orders against Kakao Pay over the same matter.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
