Mobile micro payment system

Mobile micro payment system (모바일 소액결제 시스템) today enables ordinary Koreans to pay small amount of money to the Internet shopping malls including online game sites, bus drivers, charity fund raisers and even small restaurant owners.

Among others, the payment by mobile phone and ARS (audio response system) payment method are preferred by both the customers and the digital contents providers because of their convenience.

Key words
mobile payment, micro payment system, ARS, SMS

Status quo of mobile micro payment system
Mobile payment service is very important means of micro payment, which amount to 70 percent of payments on the Internet pay web sites. The service began in 2000 and it is presumed that the transaction amounts reached 90 billion won in 2001, 270 billion won in 2002 and 400~470 billion won in 2003. The mobile market is keep growing.

The mobile payment system has the amount limit, which was drawn by mobile communications companies. Mostly mobile payment is used in buying Internet contents or paying connection fee of pay online games. Mobile payment service is one of the wireless Internet payments. A pin code of payment is sent by using the mobile phone owner’s personal information and the mobile company’s SMS (Short Message Service).

Good/bad aspects of mobile payment

 * Good aspects: convenience, the possibility of adult validation, easiness of micro payment, deferred and unified payment
 * Bad aspects : expensive commission, adult only, hard repayment, illegal use of other’s mobile phone number and social security number

As the mobile payment increases, the damages cases of surreptitious use of mobile phone and minor’s payment are increased as well. The minors’ high demand for online games enabled the fast track of game market.

Damages cases
Korea Consumer Agency reports that the number of consultation and redemption about a damage caused by online game service has been increasing since 2001.

Minors have submitted claims 53.1 percent of the total cases till November 2004, which means that minors are the large majority of victims of micro payment damages. The cases can be classified as follows:
 * Billing-related cases;
 * Minor’s use of Website content by means of mobile payment system;
 * Cases related to the legal force of the notice “Cyber cash not to be used”;
 * One-sided supply and billing related case;
 * Double-purchase caused by error;
 * Cases related to the refund demand of information fee, withdrawn through adult validation;
 * Automatic payment without user’s consent on a pay online game web site;
 * Midway cancellation of adult web site’s use;
 * Charge for the information which was never used; or
 * Repayment of the cell phone service fee, which was signed in the free-trial event period.

Micro payment-related provisions

 * 1) Specialized Credit Financial Business Act (Item 5 Article 2)
 * 2) Act on the Consumer Protection in the Electronic Commerce Transactions, etc. (Articles 8, 24)
 * 3) Communications Business Act (Articles 33, 33-2)
 * 4) Act on Promotion of Information and Communications Network Utilization and Information Protection, etc. (Articles 23-30)


 * 1) Act on Electronic Financial Transaction

Legal problems to be solved
For the safety of e-Commerce and growth of micro payment system via the Internet, the following issues have to be addressed in legal terms:
 * The legal regulation of business operator is necessary while electronic business operators need to make their own standardized contract form. It's because the repayment is usually regulated by the business operator’s contract form.
 * Data security is a very important issue in the mobile phone market.
 * Guardian’s consent of minor’s payment is required, and otherwise the contract may be canceled.
 * Use of certificate for validation and authentication should be promoted to prevent illegal use of other’s name or improper payment.
 * Class action, now employed only in securities fraud case, could be an alternative for the effective remedy for a large numbers of victims of Internet mobile payment.

Suggestions
Internet mobile payment system is convenient, but also has serious side effects. Because the regulation of the cyber malls on the one hand causes shrinking of e-Commerce, and on the other hand protects consumers, it is important to find the balance or equilibrium. Self-imposed control should also be promoted.

To achieve these aims, first, the standard terms and conditions for mobile payment is necessary. Second, personal information should be protected, especially Residence Registration Number. Third, the procedure of guardian’s consent on minor’s transaction should be well maintained. Fourth, use of certificate in mobile payment should be promoted. Lastly, class action can be considered as an effective redress for the victims.