A new regulation approved by the Financial Supervisory Service of Korea could slow domestic growth in mobile payments, an official from the regulator confirmed. Under the new policy, all transactions initiated with advanced handsets would be subject to the same security requirements that control online transactions initiated with personal computers.
Under the current laws, transactions initiated with PCs through encrypted online communications require the use of electronic signatures based on public-key certificates. The only plug-in tool currently available to download public-key certificates to PCs is Microsoft’s Active-X for its Internet Explorer Web browser.
“Given that most advanced smartphones are using the new Android [operating system], the move will deter financial players from this segment,” an official from the Credit Finance Association of Korea tells PaymentsSource. “This is not an expected move, more so because it is not improving the security of transactions on mobile devices.”
Earlier this year, the Financial Supervisory Service allowed online book retailers Aladdin and Yes to unveil mobile-payment programs for smartphone users. However, they were forced to remove them because card companies refused to collaborate, according to local reports.
