ShopeePay Taiwan Co (蝦皮支付) and Cathay United Bank (國泰世華銀行) have been targeted by the Financial Supervisory Commission (FSC) over information security and consumer protection, after lawmakers yesterday raised concerns about the e-commerce platform possibly being funded by Chinese investors.
ShopeePay and Cathay United recently partnered to issue cobranded credit cards, which reward consumers up to 4 percentage points for anything they spend on the platform.
The company’s collaboration with a local bank raised concerns over whether consumers’ data could be leaked to behind-the-scene Chinese investors, Democratic Progressive Party Legislator Kuo Kuo-wen (郭國文) told a meeting of the legislature’s Finance Committee in Taipei.
Photo: CNA
ShopeePay last year did not gain the Investment Commission’s approval to inject new capital of NT$450 million (US$15.42 million) because of issues surrounding possible Chinese capital, Kuo added.
To ensure national security, the FSC should consider creating a rule barring local banks from cooperating with a company that could be funded by Chinese capital, he said.
The commission would investigate the matter and ensure that consumers and their information is secure, FSC Chairman Thomas Huang (黃天牧) told the meeting.
The Banking Act (銀行法) does not allow banks to share their clients’ information with other companies, Banking Bureau Director-General Sherri Chuang (莊琇媛) added.
The commission would not consider creating a new rule, as a regulator should not set a particular limit on a company just because it thinks that company has some problems, Huang said.
It would be helpful if critics presented evidence that ShoppeePay’s Chinese capital exceeds the legal limit, he added.
In related news, multiple lawmakers yesterday criticized the FSC for revising the legal limit on the average daily amount of money managed by third-party service providers from NT$1 billion to NT$2 billion, saying it was a move to help ShoppeePay circumvent regulations.
Since last year, ShopeePay assigned its affiliate Shopee Taiwan Co (樂購蝦皮) to manage fund flows as the average daily amount it dealt with had reached NT$3 billion, the lawmakers said, adding that the daily amount at Shopee Taiwan did not surpass NT$2 billion in the first quarter.
With the legal limit revised to NT$2 billion, Shopee Taiwan would not have to apply for an electronic payment license, they said.
Huang rejected the criticism, saying that the revision was for all third-party companies, whose businesses are growing.
ShopeePay said in a statement that its shareholding structure is transparent and meets local regulations, with its largest shareholders from Singapore and the US.
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