Name
Global FinTech Guide
Country _ Name
Korea, Republic of
SectionTitle
Identification
Body
FinTechs belonging to this category provide identification services, which are required for most banking services.

Introduction

Attitude of the country towards identification services

As various services that require contactless identification, such as digital finance, are newly implemented and developed, the demand for contactless identification is also increasing. As such, companies that provide contactless services such as Big Tech and banks have entered the identification verification services market in order to reduce fees and improve user convenience. As mentioned in Section ii. below, identification services are regulated by the Information and Communication Network Act. The Korea Communications Commission lowered the bar for businesses to enter the market by easing entry regulations in early 2022, but it has maintained the position that entry into the identity verification market should remain restricted in order to ensure the provision of safe and reliable identity verification services.


Legal affairs

Obligations and requirements to provide identification services

The Information and Communication Network Act defines identification services as the development, provision, and management of alternative means, and provides that the performance of such identification services requires the appointment by the Korea Communications Commission. 'Alternative means' shall mean the method of identifying a person without using the resident registration number.

Korea Communications Commission determines whether the applicant business entity is capable of safely and reliably performing identification services by focusing on 87 evaluation criteria such as physical, technical and management plans, technical capacity, financial capacity, the adequacy of the size of the facility, etc. In particular, with respect to financial capacity, a capital of KRW 8 billion or more is required.

Additional comments regarding the legal situation for identification services or what FinTech’s must be aware of in this business area

With respect to identification verification agencies, new businesses have relative difficulty entering the market as there are numerous evaluation criteria and the Korea Communications Commission is known to strictly examine whether each criterion is met. For example, Naver and Kakao, which are Korea's two major big tech companies, applied to be appointed as identification verification agencies last year, but both companies were disqualified because they could not verify that the account holder and the person whose name is on such account were identical.

However, as described in Section i. above, in February 2024, Korea Communications Commission eased entry regulations to facilitate new businesses to enter the identification verification service market. To be more specific, there were originally 92 evaluation criteria, but the number of criteria was reduced to 87. Further, while applicants were originally required to receive 'suitable' on all of the evaluation criteria, a partial score evaluation system was implemented so that a business can be appointed as an identification verification agency as long as it receives 'suitable' on some of the major evaluation criteria and two quantitative evaluation criteria and receives 800 out of 1,000 points for 64 other evaluation criteria. In addition, businesses that met other requirements but received less than 800 points can be now subject to conditional appointment.

Separately, starting from July 2024, additional physical, technical, and administrative safeguard requirements have been implemented for identification verification agencies that handle or generate ‘Connecting Information’ (i.e., irreversibly encrypted data derived from resident registration numbers).


Economic conditions

Market size for identification services and biggest companies in this business area

The size of the identification verification services market is estimated to be approximately KRW 100 billion. The three major mobile carriers-SKT, KT, and LG U+-collectively account for more than 90% of the market. Their dominance is largely attributed to the widespread use of the ‘PASS’ service, a joint mobile identification platform operated by the three carriers, which has surpassed 35 million subscribers as of mid-2025.

Additional comments regarding the economic situation for identification services or what FinTech’s must be aware of in this business area

Although a total of 26 businesses have been appointed as identification verification agencies by June 2025, the overwhelming market dominance of the three mobile carriers poses a substantial barrier to market entry. Even companies that successfully meet the Korea Communications Commission’s stringent evaluation criteria often face significant challenges in securing market share.

In fact, credit card companies, which had previously entered the identification services market, have been withdrawing from the business due to a continued decline in user demand. As of July 1, 2025, BC Card and KB Kookmin Card have already terminated their identification services, and Lotte Card and Hana Card have officially announced plans to discontinue such services within 2025.



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