Kim Rahn is the managing editor of The Korea Times. Since joining the company in 2003, she has covered various beats including the presidential office, Seoul city government, the Bank of Korea and the tourism industry. In 2014, she won the Society of Publishers in Asia (SOPA) award for her coverage of the ordeals of migrant women in Korea.
Card firms told to pay for data protection
By Kim Rahn
Financial authorities have ordered credit card companies to raise up to 100 billion won in funds to implement measures to strengthen customer information protection following the recent massive data theft case.
The Financial Supervisory Service (FSS) summoned heads of eight credit card firms last Friday for an unscheduled urgent meeting, according to FSS officials, Sunday. They were CEOs or vice chiefs of KB Kookmin, Samsung, Shinhan, Lotte, Hana SK, Woori, Hyundai and BC cards.
The meeting, presided by FSS Senior Deputy Governor Cho Young-je, came as the companies are said to be reluctant to implement the government’s directives on data protection citing the financial costs despite the theft of tens of millions of card users’ personal information earlier this year.
“We urged them to raise social contribution funds within this year and donate the money for mom-and-pop stores to set up integrated circuit (IC) card terminals, as having the new card reading system was part of the government’s client information protection measures,” FSS official Kim Young-ki said.
The FSS is encouraging shops and restaurants to replace currently used point-of-sale (POS) terminals with IC terminals because the latter has a more strengthened security system than the former.
It tasked the firms to raise up to 100 billion won to finance the terminal replacement.
“In 2011 when customers complained of card companies’ taking unused points, the companies promised to raise 20 billion won every year for social contribution. But they collected money only once, and about 5 billion won is left,” Kim said.
He said the companies can initially raise about 80 billion won, the amount for the 2012-2015 period, to carry out the replacement.
“Changing the terminals is a government policy and a must for client data protection, but small-sized shops and restaurants have difficulty in changing due to costs. Supporting their terminal replacement will be within the purpose of ‘social contribution,’” he said.
Kim argued that raising the funds should not be a huge financial burden on credit card companies as they make more than 1 trillion won in net profits annually, which makes it possible for them to share the costs.
“They are not opposed to the need for the replacement. Card firms will soon have working-level discussion on how to raise the fund, how to replace the terminals and how to manage the new ones. We hope they can finish all the process by early next year,” he said.
The FSS plans stricter guidelines and inspections if the companies keep hesitating.
After the meeting, the firms pledged to raise the funds as soon as possible and discuss the issue with the Credit Finance Association.
An official at one of the card companies said, “The participating CEOs agreed that card firms should play the leading role in strengthening security of card payment system. They promised that they would follow the government measures and recommendations actively.”