Kakao Pay shared the data of over 40 million users with Singapore's Alipay without consent, prompting Korea's FSS to label the act illegal under national laws.
The FSS determined that Kakao Pay's claims of encrypting data and not sharing it with a third party were misleading, as the contract did not clarify data processing.
Kakao's partnership with Alipay, intended to facilitate payments for Korean customers abroad, violated the Credit Information Use and Protection Act by sharing sensitive data.
The illegal data transfer is particularly alarming because it involved cross-border sharing to Singapore, which necessitates stricter consent protocols under the law.
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