Legal Insight: Regulatory Requirements for Foreign Gift Card Distribution in Korea

Published Date: January 22, 2025

The Financial Services Commission (FSC) has provided clarity on the regulatory ​framework governing the distribution and sale of foreign dollar-denominated gift ​cards (Amazon, Google, Apple, etc.) in Korean markets under the Electronic Financial ​Transactions Act (EFTA).

Distribution Models and Registration Requirements

Simple distribution and sales of overseas-issued gift cards (such as Amazon, Google, ​and Apple) in domestic markets do not require registration under EFTA. However, ​businesses engaging in comprehensive payment services must register as prepaid ​business operators with the FSC.

Key Registration Triggers

Registration with the FSC becomes mandatory when businesses:

• Issue and manage prepaid payment vouchers for electronic transactions
  
• Handle user prepaid balance management systems
  
• Actively participate in electronic payment method issuance and administration
  
• Perform direct management of prepaid electronic payment mechanisms
  

Legal Framework Details

The EFTA provides specific guidelines through:

• Article 2 definition of prepaid electronic payment methods as electronically ​stored monetary value certificates
  
• Article 28(2) registration requirements for issuers and managers
  
• Article 36-2 and Article 22-4(3)(2) prohibitions against misleading practices ​regarding payment instrument issuance
  

Business Compliance Guidelines

To ensure regulatory compliance, businesses must:

• Clearly distinguish between simple distribution and comprehensive payment ​services
  
• Maintain transparency regarding the identity of the gift card issuer
  
• Register with the FSC if offering additional financial services beyond simple ​distribution
  
• Avoid any practices that could mislead users about the issuing entity
  

This clarification aims to promote market efficiency while maintaining appropriate ​regulatory oversight in Korea's gift card distribution sector.