South Korea's Financial Supervisory Service (FSS) launched a fraudulent payment response council on the 15th with major payment gateway companies including Naver Financial, Kakao Pay, and Viva Republica to establish a joint industry response system. The initiative addresses repeated consumer damage from fraudulent payments that existing fraud detection systems have failed to prevent. FSS Deputy Governor Lee Jong-oh emphasized that payment gateway companies risk losing market trust if they focus solely on user convenience and profit expansion while neglecting fraudulent payment prevention, calling for integrated industry-wide cooperation to protect consumers.
FSS Establishes Two Working Groups for Fraudulent Payment Prevention
The FSS organized the newly launched council into two working groups: a Fraud Detection System (FDS) division and an Anti-Money Laundering (AML) division. The council plans to develop a standard operational guideline for fraudulent payment prevention and response by the second half of the year. The FSS will complete a draft of the standard operational guideline by October, conduct opinion gathering, and finalize the document in November with a public announcement of results.
Deputy Governor Lee stated that abnormal transactions not filtered by financial companies' FDS also evade detection by payment gateway companies, leading to fraud incidents. He stressed that the council must establish a practical improvement plan and create a cooperative system for industry-wide joint response.
Industry Experts Commit to Active Participation in Council
Academic and security experts attending the inaugural meeting expressed agreement on the necessity of joint response to fraudulent payments through the council and pledged to actively share abnormal transaction detection experience and response cases. Kim Jong-hyun, chairman of the Korea Fintech Industry Association, stated that individual company-level responses have limitations against increasingly sophisticated and intelligent fraudulent payment methods. He committed that the association will faithfully collect field opinions to ensure the council does not remain limited to formal discussions.
Ko Chul-soo, vice chairman of the Korea Financial Crime Prevention Association, promised active participation to develop realistic measures immediately applicable based on field experience accumulated through FDS and AML compliance responses.
FAQ
What did South Korea's FSS announce on the 15th regarding fraudulent payments?
The FSS launched a fraudulent payment response council with major payment gateway companies including Naver Financial, Kakao Pay, and Viva Republica to establish a joint industry response system and develop standard operational guidelines for fraudulent payment prevention.
What is the timeline for the FSS fraudulent payment guideline development?
The FSS plans to complete a draft of the standard operational guideline by October, conduct opinion gathering, and finalize the document in November with a public announcement of results.
