The Gyeonggi Nambu Provincial Police's anti-corruption and economic crime unit searched Kakao Pay's offices in the Bundang district of Seongnam over two days on Monday and Tuesday, seizing digital records tied to suspected violations of the credit information and electronic financial transaction laws.
It marked the first raid since police opened the case in March at the request of the Financial Supervisory Service (FSS). Officers moved in to examine the full decision-making chain behind the firm's data-sharing arrangement, according to the authorities.
Kakao Pay is suspected of transferring 54.2 billion pieces of personal data belonging to about 40 million customers to Alipay between 2018 and May 2024. The information was allegedly funneled to build a so-called "NSF score" model that Apple had outsourced to Alipay to gauge the likelihood that a user's account would fall short of payment.
Those booked so far are Kakao Pay executives and staff along with the corporate entity, though their identities and number have not been disclosed. Police plan to question witnesses and suspects once analysis of the seized material is complete.
The raid lands as South Korean regulators sharpen their response to a run of large-scale data failures.
Last month, the Personal Information Protection Commission slapped a record 624.6 billion won ($415.6 million) fine on e-commerce leader Coupang over a breach that exposed the data of more than 33 million people, underscoring the mounting price of lax safeguards in the country's digital economy.
Regulators have already come down hard on Kakao Pay. The commission fined the company 5.97 billion won in January last year, and the FSS in February issued an institutional warning, a heavy sanction, along with penalties of 12.98 billion won and 4.8 million won.
Kakao Pay, which contends the transfer was lawful outsourcing, lost a related administrative suit on June 11, with the court ruling that data subjects could not be seen to have "clearly and specifically consented" to their information being used as a creditworthiness gauge. The company has appealed.
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