On May 19, the Ministry of Strategy & Finance made a prior announcement of legislation for including payment gateways (PGs) into the category of organizations engaged in foreign exchange transactions. According to the current Foreign Exchange Transactions Act, the category includes only financial companies such as banks and securities firms.
The revision is to let foreigners use foreign payment systems like Alipay in Korea, which the government expects will result in a significant increase in payment by foreign tourists in Korea. At present, foreign PGs have to go through Korean PGs to provide payment services in Korea.
However, the Korean PGs have not been classified as organizations engaged in foreign exchange transactions and this has blocked a business tie-up between the PGs. After the legislation, foreign PGs can provide payment services for foreigners in Korea in partnership with Korean PGs.
It is said that Minister of Strategy & Finance Choi Kyung-hwan and Alibaba chairman Jack Ma discussed the issue during their meeting on the previous day. At the press interview that followed the meeting, the former remarked that Alipay would start its business in Korea soon.
Even so, it is likely that Alipay will take a roundabout way instead of PG registration with the financial authorities for direct financial services for Koreans.