Key Aspects and Implications of Proposed Amendment to Electronic Financial Transaction Act
2023.09.07.
On August 24, 2023, the proposed partial amendment (the "Proposed Amendment") to the Electronic Financial Transaction Act (the "EFTA") was passed by the National Assembly. The Proposed Amendment introduces regulations regarding the management of electronic prepayment means business, which are outlined in the "Guidelines for Electronic Financial Service Providers on Protection of User Funds." It requires electronic financial service providers offering payment services via electronic prepayment means (the "Prepayment Service Providers" or "PSPs") to manage prepaid funds separately, employing secure methods such as entrustment or deposit. Additionally, it extends the scope of businesses subject to the EFTA by raising the criteria for exemption from the electronic financial business license, and establishes rules that PSPs must comply with. Furthermore, the Proposed Amendment institutionalizes the small-scale Buy Now Pay Later (the "BNPL") business, previously a subject of the regulatory sandbox, as a concurrent business operation of a PSP, thus promoting the growth of fintech business.
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