Cha & Kwon Law Offices advised an operator of an online sales platform on whether the integration of a long-term installment payment service would be subject to Korean financial regulations.

Under the proposed business model, consumers would apply for long-term installment payments through the platform, while a financial institution would conduct a credit assessment, pay the purchase price to the seller, and subsequently collect the amount from consumers in installments. The key issues included the extent to which the platform operator could be deemed to be involved in the payment and financial services, and whether such involvement could constitute a regulated activity, including financial product brokerage.

Cha & Kwon Law Offices conducted a comprehensive review of the contractual relationships among the parties, the flow of funds, and the actual operation of the service. Based on this review, we analyzed the distinction between a structure in which the platform operator functions solely as a service provider and one in which the platform operator is substantively involved in the provision of financial services.

We also advised on the need to clearly distinguish the respective roles of the platform operator and the financial institution, both contractually and in actual operations, and provided recommendations for establishing an appropriate contractual and operational framework.

Cha & Kwon Law Offices provides legal advice on business models that combine platform services with financial services, including assessments of regulatory applicability based on the actual operation of the business and the respective roles of the parties, as well as advice aimed at ensuring the legal soundness of the overall business structure.