Definition of electronic financial transactions
What is “electronic financial transaction”?
- An “electronic financial transaction” refers to a transaction where financial companies or electronic financial business operators provide financial products and services through electronic devices (hereinafter “electronic financial business”), and users utilize them in an automated manner without face-to-face interaction or communication with the employees of the financial company or electronic financial business operators (Subparagraph 1 of Article 2 of the Electronic Financial Transactions Act).
※ “Financial company” refers to institutions such as banks, community credit cooperatives, post offices, etc., as defined in Subparagraph 1 of Article 2 of the Act on Real Name Financial Transactions and Confidentiality and Article 2 of the Enforcement Decree of the Act on Real Name Financial Transactions and Confidentiality.
※ “Electronic financial business operator” refers to those who have obtained permission or registration under Article 28 of the Electronic Financial Transactions Act (excluding financial companies) (Subparagraph 4 of Article 2 of the Electronic Financial Transactions Act).
Use and management of access media (passwords, biometric information, security cards, cash cards, etc.)
Issuance of access media
- When financial companies or electronic financial business operators issue access media, they must do so after verifying the identity of the user upon their request. However, they can issue it without the user’s request or identity verification in the following cases (Article 6(2) of the Electronic Financial Transactions Act; Article 6(1) of the Enforcement Decree of the Electronic Financial Transactions Act):
1. For prepaid electronic payment means or electronic currency with a maximum issuance limit of KRW 50,000 or less;
2. For access media that has not been used within 6 months before the scheduled renewal or replacement date, if written consent (including consent via an electronic document with an electronic signature) has been obtained from the user; or
3. For access media that has been used within 6 months before the scheduled renewal or replacement date, if the user has been informed of the scheduled issuance and the fact that they can raise objections within 20 days, and no objections have been raised by the user within that period, implying their consent.
Prohibition on transfer, etc., of access media
- Unless otherwise provided by other laws, no one should engage in the following actions concerning the use and management of access media (the main body of Article 6(3) of the Electronic Financial Transactions Act):
1. Transferring or acquiring access media;
2. Renting or lending access media in exchange for compensation, demanding or promising compensation, or storing, delivering, or distributing it;
3. Renting or lending access media with the intent to use it for a crime or knowing it will be used for a crime, or storing, delivering, or distributing it;
4. Using access media as collateral; or
5. Mediating, brokering, advertising, or soliciting the actions from 1 to 4 above, or receiving, demanding, or promising compensation for such solicitation.
- Violators may be sentenced to imprisonment for up to 5 years or fined up to KRW 30 million (Article 49(4)1 through 4 of the Electronic Financial Transactions Act).
Use and management of account information
Prohibition of Providing Information for Criminal Purposes
- No one may provide, be provided with, or store, transmit, or distribute account-related information with the intent to use it for criminal purposes or knowing that it will be used for criminal activities (Article 6-3 of the Electronic Financial Transactions Act).
Penalties for Violation
- Violators will be subject to imprisonment for up to 5 years or a fine of up to KRW 30 million (Article 49(4)5 of the Electronic Financial Transactions Act).
Verification of electronic financial transaction details
Transaction verification
- Financial companies or electronic financial businesses must allow users to verify transaction details through electronic devices (including devices previously agreed upon between the financial company or electronic financial business and the user) (Article 7(1) of the Electronic Financial Transactions Act).
Obligation to provide transaction details in writing
- If a user requests transaction details in writing (excluding electronic documents), financial companies or electronic financial businesses must issue the written details within 2 weeks from the date of the request (Article 7(2) of the Electronic Financial Transactions Act).
- Violators will be subject to a fine of up to KRW 10 million (Article 51(3)1 of the Electronic Financial Transactions Act).
Request for correction of electronic financial transaction errors
User’s request for error correction
- If a user notices an error in an electronic financial transaction, they can request the financial company or electronic financial business to correct it (Article 8(1) of the Electronic Financial Transactions Act).
Notification of cause of the error and its resolution
- Upon receiving a correction request or discovering an error in an electronic financial transaction, financial companies or electronic financial businesses must immediately investigate and resolve the issue, then notify the user of the cause and resolution via document, phone, or email within 2 weeks (Article 8(2) and (3) of the Electronic Financial Transactions Act; Article 7-2 of the Enforcement Decree of the Electronic Financial Transactions Act).
- Violators will be subject to an administrative fine of up to KRW 10 million (Article 51(3)2 of the Electronic Financial Transactions Act).