[Legal Advice on Prepaid Electronic Payment Systems under the Electronic Financial Transactions Act]

Law firm Veat provided legal advisory services related to prepaid electronic payment methods (mileage) to A, a company operating domestic large online shopping malls.

A, a company operating domestic large online shopping malls, inquired about the limits of mileage that members can use directly from their shopping mall using the prepaid electronic payment methods (mileage) and related matters.

Accordingly, Law firm Veat provided legal review opinions on fixed mileage and waiting point policies related to the prepaid electronic payment methods (mileage) used in A’s shopping mall, based on the Electronic Financial Transactions Act and the Electronic Financial Supervision Regulations.

What is a prepaid electronic payment method?

A prepaid electronic payment method is defined as a monetary value that can be transferred electronically stored as a voucher or related information thereof, excluding electronic currency, provided that all the requirements of the following items are met. (Article 2(14) of the Electronic Financial Transactions Act)

• a. Purchase goods or services from a third party other than the issuer (including special interests as defined in the Presidential Decree) and use the payment;
• b. The scope of goods or services available for purchase is more than the mid-tier industry as defined in the Statistics Act (as notified by the Statistics Bureau pursuant to Article 2(1) of the Statistics Act, referred to as “the mid-tier industry” throughout this Article);

Various platforms actively utilize prepaid electronic payment methods and convenient payment services as payment methods and marketing, etc. Following a case where unregistered electronic financial companies abruptly stopped issuing prepaid electronic payment methods, causing significant damage to users, the Financial Supervisory Service is closely monitoring the financial status of unregistered prepaid electronic payment companies.

Based on its experience providing legal advice to numerous fintech companies, Law firm Veat possesses abundant experience and know-how on legal issues related to electronic financial businesses, the Electronic Financial Transactions Act, and prepaid electronic payment methods.

If you need registration of electronic financial businesses, legal review of the Electronic Financial Transactions Act, or prepaid electronic payment methods, please contact Law firm Veat at any time.

Thank you.
Law firm Veat