Payment gateways must hold merchant settlement funds externally — effective 17 December 2026 | 60% in year one, all of it after two years
From 17 December 2026, a payment gateway must place the settlement amounts owed to merchants in a trust, a deposit or a payment guarantee insurance. The addenda phase it in: at least 60% in the first year, at least 80% in the second, and the full amount after two years. Using the money for any other purpose carries up to ten years in prison or a fine of up to ₩100M.
Conditions used in the video
- Effective date
- 2026-12-17
- Promulgated
- 2025-12-16
- Basis
- Electronic Financial Transactions Act Article 25-4 (new) · Addenda Article 2 · Article 49(1)5
- Money concerned
- settlement amounts a gateway owes to merchants
- Method
- trust · deposit · payment guarantee insurance
- Use for other purposes
- up to ten years in prison or a fine of up to ₩100M
Results
- First year (from 2026-12-17)
- at least 60% held externally
- Second year
- at least 80%
- After two years
- the full amount
- Funds held externally
- no set-off · no seizure
- If the company goes bankrupt
- merchants paid first
- Prepaid balances
- at least 50% held apart (already in force since 2023-09-14)
Why it works this way
When you sell online, the payment passes through a payment gateway before it is settled to you. Today nothing stops the gateway from keeping that settlement money in its own operating account. If the company collapses, merchants lose their settlements and consumers lose their refunds.
Electronic Financial Transactions Act Article 25-4 (effective 2026-12-17).
- Settlement amountmoney owed to merchants
- Held externallytrust · deposit · payment guarantee insurance
- Protectionno set-off or seizure · merchants paid first in a bankruptcy
Using the settlement amount for any other purpose carries up to ten years in prison or a fine of up to ₩100M.
The addenda phase it in. For the first year after the effective date at least 60% must be held externally, at least 80% in the following year, and the full amount after two years. For a merchant that means only 60% of the settlement is protected in year one.
Addenda Article 2 (special provision).
- 2026-12-17 to 2027-12-16at least 60%
- 2027-12-17 to 2028-12-16at least 80%
- From 2028-12-17the full amount
The rule requiring at least 50% of prepaid balances to be held apart (Article 25-2) has been in force since 14 September 2023 and is separate.
This video and page describe a measure that has been promulgated but has not taken effect. Details may change through a decree or notice.
In short, from 17 December 2026 gateway settlement money is protected by being held externally, rising from 60% in year one to the full amount after two years. It cannot be seized, and merchants are paid first in a bankruptcy.
The legal basis
Drawn from government announcements and the statutes themselves as primary sources, covering only the relevant part.
Electronic Financial Transactions Act Article 25-4 (External management of settlement amounts)
In force Effective 2026-12-17 (promulgated 2025-12-16; Addenda Article 1)
An electronic payment gateway must manage the settlement amounts payable to merchants by one of trust, deposit or payment guarantee insurance. Externally managed assets may not be set off or seized, and in a bankruptcy or similar event are paid to merchants first.
What this means
Your sales proceeds can no longer be the gateway's working capital. If the company collapses, that money comes back to you first.
Electronic Financial Transactions Act Addenda Article 2 (Special provision) · Article 49(1)5 (Penalties)
In force Effective 2026-12-17
At least 60/100 of the settlement amount for one year after the effective date, at least 80/100 for the following year, and the full amount thereafter. A person who uses settlement amounts for another purpose is punished by up to ten years in prison or a fine of up to ₩100M.
What this means
Protection starts at six tenths and reaches the whole after two years. Misappropriation is a serious offence.
Frequently asked
Is the whole settlement protected in the first year?
No. Under the addenda, at least 60% in the first year, at least 80% in the second, and the full amount only after two years.
What happens to merchants if the gateway fails?
Settlement amounts held externally cannot be set off or seized, and in a bankruptcy they are paid to merchants first.
Do prepaid balances change too?
No. The rule that at least 50% of prepaid balances be held apart has been in force since 14 September 2023. This amendment covers gateway settlement money.
What if the gateway spends the settlement money elsewhere?
Using settlement amounts for another purpose carries up to ten years in prison or a fine of up to ₩100M.
Results are estimates based on the inputs and on the rules as at the stated date. They may differ from a lender's actual assessment, and the rules change often. Take professional advice before any decision that matters.