South Korea's Financial Services Commission (FSC) approved four innovative financial services for market testing, covering remote credit card issuance against cash deposits, automated loan searches and a higher prepaid payment limit for foreign visitors. It also accepted a request to amend registration requirements for intermediaries selling deposit products, supporting the continued operation of Naver Financial and Hana Bank's Pay Money account service after its designation expires. That service links Naver Pay prepaid balances to accounts held in users' names at Hana Bank. Amendments to the relevant supervisory regulation are already under consultation. Shinhan Card and Woori Card will be able to issue credit cards against cash security deposits rather than pledged bank deposits, removing the need for applicants to visit a bank branch. Shinhan's service uses prepaid electronic payment instruments to transfer the security deposit, while Woori's targets foreign residents with limited financial histories. Both providers must keep security deposits separate from their own assets and restrict issuance to customers whose personal credit scores cannot be established because of insufficient financial histories. Banksalad's MyData service will allow users to delegate authority to request preliminary loan assessments and receive results when their creditworthiness improves, for example through higher credit scores or income. Delegated consent must specify its purpose, scope, method and duration, and searches must be limited to defined triggers to prevent unnecessary inquiries or disruption to loan assessments. Users must approach the selected lender directly to take out a loan. Moin will be allowed to issue bearer prepaid electronic payment instruments to foreign visitors up to KRW 1 million, double the existing KRW 500,000 limit. Identity safeguards generally require matching passport information extracted by optical character recognition against the electronic passport chip, alongside live facial verification, with an alternative verification procedure permitted where electronic passport authentication is physically impossible.
South Korea's Financial Services Commission approves four innovative financial services, including remote credit cards secured by cash deposits
South Korea's Financial Services Commission approved four innovative financial services covering credit cards secured by cash deposits, delegated loan searches and a KRW 1 million prepaid payment limit for foreign visitors. The approvals impose safeguards including segregation of card security deposits, limits on automated loan inquiries and enhanced passport checks. The FSC also accepted regulatory changes to support the continued operation of Naver Financial and Hana Bank's linked prepaid balance and bank account service after its designation expires.