[Alpha Biz= Kim Jisun] Kakao Pay has been fined 6 billion won for illegally transferring the personal information of 40 million users abroad.
The Personal Information Protection Commission (PIPC) announced on the 2nd that it had recently held a plenary meeting and imposed a fine of 5.968 billion won on Kakao Pay for transferring user data overseas without consent. Apple was also fined 2.405 billion won, along with an additional penalty of 2.2 million won.
The PIPC has ordered both companies to comply with legal overseas data transfer requirements. Additionally, it instructed Apple and its subcontractor, Alipay Singapore E-Commerce Private Limited, to delete the NSF (Non Sufficient Funds) score calculation model for Kakao Pay users. The NSF score is used to assess the likelihood of insufficient funds when bundling multiple microtransactions into a single charge on Apple's platform.
Kakao Pay was found to have provided the personal data of approximately 40 million users to Alipay without consent for Apple’s service user evaluation purposes. The PIPC also confirmed that Apple failed to inform users that their personal data was being transferred and processed overseas by Alipay, its third-party subcontractor.
Kakao Pay transmitted payment data to Apple through Alipay, which provides Apple's integrated payment system. Apple, in turn, outsourced the processing of payment-related personal data, including NSF score calculations, to Alipay.
Between April and November 2018, Kakao Pay transferred user data to Alipay three times without obtaining separate consent for third-party provision or international data transfer. The cumulative number of records transferred reached approximately 54.2 billion.
Notably, less than 20% of Kakao Pay users had registered the service as a payment method on Apple, yet Kakao Pay still transferred the entire user database, including non-Apple users, to Alipay. The PIPC highlighted that among domestic payment services integrated with Apple, Kakao Pay was the only one for which Alipay calculated NSF scores.
AlphaBIZ Kim Jisun(stockmk2020@alphabiz.co.kr)
