Living Proof: Friction Kills Commerce

South Korea appears to be on the verge of getting rid of a decades-old security policy that has made competing in the global online marketplace problematic. At the heart of the issue are rules requiring first-time online shoppers to install ActiveX controls and to receive an authentication certificate before making a purchase or paying a bill.

ActiveX, a plug-in Microsoft software product usable only with Internet Explorer for financial transactions, is especially difficult to accommodate for the country’s Apple computer owners, not to mention users of other browsers, such as Chrome or Safari, and mobile platforms. Anyone wanting to buy anything worth more than 300,000 won (U.S.$277) is required to use an online authentication certificate service.

Political pressure from the country’s consumers has apparently caught the attention of Korea’s Park Geun-hye government, which recently began considering a push for deregulation.

A local lobbying group, the Federation of Korean Industries, found in a recent survey that nearly 80 percent of South Koreans abhor the regulations requiring use of ActiveX.  Asked when they felt most uncomfortable with ActiveX, 79.7 percent cited shopping online, followed by 71.7 percent who said doing online banking transactions. Both responses were more than twice the rates given other reasons for dissatisfaction.

In a statement, Yoo Hwan-ik, head of the federation’s industrial research division, called ActiveX “a barrier to creative distribution” that must be addressed. “If the problem is corrected, Korea can reduce its 720 billion won deficit in the international cCommerce field and boost (the) local online market,” he said in the statement, reported in Korea Joongang Daily.

Last week, the Financial Services Commission, which plays a role in regulating online transactions, said the government early this month would announce details on how the regulations might be revised and allow foreigners to make purchases online without the need for digital certificates. However, government officials reportedly decided to act more quickly and revise the rules immediately, with implementation occurring by the end of May or June.

The new rules also would apply to locals, not just foreign buyers online, according to a report in the Wall Street Journal.



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