ISTANBUL

South Korea’s financial watchdog is preparing to impose a 15 billion won (approximately $11 million) fine on Kakao Pay for allegedly transferring massive volumes of user data to Chinese payment platform Alipay, local media reported Wednesday.

The South Korea Financial Supervisory Service (FSS) made the decision following a disciplinary review committee meeting, according to the Korea JoongAng Daily. The penalty comes in response to what officials describe as a serious data breach that may have affected as many as 40 million users.

From 2018 to May 2024, Kakao Pay, a widely used mobile payment platform in South Korea, reportedly transferred more than 54.2 billion pieces of personal information to an Alipay-affiliated entity based in Singapore, triggering investigations under multiple regulatory frameworks.

The FSS also recommended a formal warning -- rather than a harsher sanction -- for the company’s CEO. The final decision on the fine and other penalties will be made by the Financial Services Commission, which is expected to review the case later this month.

In January, the Personal Information Protection Commission had already fined Kakao Pay nearly 6 billion won ($4 million) for violating Korea’s Personal Information Protection Act. The company is also under investigation for breaches of the Electronic Financial Transactions Act.

Separately, Chosun Daily reported on Tuesday that one of two Chinese high school students apprehended for filming military facilities told police his father is a member of China’s public security bureau. Authorities are investigating a string of similar cases involving unauthorized photography of South Korean military sites.