Prepaid electronic payment service provider, advised by Law firm Veat, prepares for revised laws.

Law firm Veat received a request from Company A (hereinafter referred to as the "client"), which provides a mobile gift card purchase service using points, to review the legal implications of whether the client's service qualifies as a prepaid electronic payment means.

The client provides a service that allows users to purchase mobile gift cards using points accumulated within the service.

Law firm Veat's e-commerce team reviewed whether the point system qualifies as a prepaid electronic payment means and whether it would be subject to legal regulations if used to purchase goods or services from a third party other than the issuer, taking into account the revised 「Electronic Financial Transactions Act」, which will be implemented on September 15, 2024.

What is the revised 「Electronic Financial Transactions Act」 scheduled to be implemented on September 15, 2024?

The revised Electronic Financial Transactions Act, scheduled to be implemented on September 15, 2024, significantly strengthens the legal scope and regulations related to prepaid electronic payment means and includes important changes that companies providing various electronic financial services must be aware of.

The revised Electronic Financial Transactions Act broadens the scope of prepaid electronic payment means, which means that some service providers who were not previously registered as prepaid service providers may now be included in the new prepaid service provider registration target. Particularly, as the legal obligations related to the issuance and operation of prepaid electronic payment means have been strengthened, companies concerned must complete registration by the expiration date of their prepaid service provider registration.

Furthermore, this revised law has significantly reduced the exemption reasons for prepaid service provider registration. The conditions for exemption from prepaid service provider registration have been changed to be more stringent, and as a result, many companies may be newly included in the registration target.

This revised Electronic Financial Transactions Act strengthens the obligation for companies providing prepaid recharge services to register as prepaid service providers and requires them to comply with legal requirements. Accordingly, companies operating points and similar services should expedite the preparation of prepaid service provider registration procedures in accordance with the revised law, and should carefully review the eligibility for registration and legal requirements with the assistance of a legal expert familiar with e-commerce related laws.

Law firm Veat is providing professional legal advice to help companies minimize legal risks and continue stable business operations in line with these legal changes. We are proactively understanding and analyzing the revised law and helping companies adequately respond to the new regulatory environment.

If you operate a prepaid electronic payment business and require legal advice, please contact Law firm Veat.

Thank you.

Law firm Veat