The Act Governing Issuance of Electronic Stored Value Cards (E-Cards Act) has been amended for the first time since its promulgation in 2009, effective from 26 June 2015. Key points of the amendments are as follows:
- The definition of "use for multiple payment purposes" under Article 3 was amended to mean using an electronic stored value card to pay for products and services provided by merchants, or to pay government fees and other fees as approved by the competent authority, excluding:
- Using the electronic stored value card to pay for transportation services with the approval of the competent authority; and
- Accepting deposits of funds as stored value funds by electronic payment institutions. Such funds are now excluded since the Act Governing Electronic Payment Institutions has regulated the same.
- Article 5-1 is newly stipulated that where the issuer issuing electronic stored value cards in registered form, if the issuer meets certain criteria, it may transfer the funds stored on the registered electronic stored value card of a cardholder to the electronic payment account of the same cardholder upon the instruction of the cardholder. However, the competent authority may impose transfer limits.
- Articles 7 and 29 were amended that the issuer of electronic stored value cards may concurrently engage in electronic payment business after obtaining approval of the competent authority pursuant to the Act Governing Electronic Payment Institutions; electronic payment institutions may concurrently engage in electronic stored value card business after obtaining approval of the competent authority pursuant to the E-Card Act.
- Article 18 was amended that non-bank issuers shall set aside a certain percentage of the earned interest or other proceeds from the stored value funds of electronic stored value cards and deposit the amount in a dedicated bank account to reward cardholders or for other purposes as prescribed by the competent authority.
- Article 22 was amended that the issuer shall provide the relevant services to cardholders for them to inquire about their transaction details.
- Article 29-1 is newly stipulated that the issuers shall join self-regulatory organizations, and shall comply with the business rules and codes of practice of such self-regulatory organizations.
- The criminal liability under Article 30 was amended as summarized below:
- The penalty for counterfeiting or altering electronic stored value cards was deleted since such conducts have been punishable under the Criminal Code;
- Before the amendment, if a person violates the relevant provisions under the E-Cards Act and the illegal gains reach a certain amount, such person shall be liable for aggravated criminal liability. After the amendment, in consideration of the practical difficulty in identifying criminal proceeds, the element of criminal proceeds as a criminal constitutive element for additional criminal liability was removed, and the fine limits have been increased;
- To maintain market order, it is newly stipulated that selling electronic stored value cards issued by non-issuers shall be subject to penalty; and
- It is clearly stipulated that the representatives, attorneys, employees or other individuals of a legal entity which violates the E-Cards Act shall be subject to penalty as well.
- Articles 31, 33 and 35 were amended and Article 31-1 is newly added with regard to the administrative penalties.
In addition, since Article 42-1 of the Banking Act was deleted, the Financial Supervisory Commission revoked the Regulations Governing Approval of the Issuance of Stored Value Cards by Banks accordingly on 23 April 2015. Subsequently, payment instruments for multiple purposes are solely governed by the E-Cards Act, applicable to both bank and non-bank issuers of electronic stored value cards.