Jkos Network Co Ltd (街口網絡) still needs the Financial Supervisory Commission’s (FSC) approval to add investment services to its wallet app, JKo Pay (街口支付), the commission said yesterday after Jkos said that it would launch a new product on Monday that would provide guaranteed annualized returns.
Jkos said the returns would range from 1.2 percent to 1.8 percent, but they would only be guaranteed for 500,000 users, each of whom would be allowed to deposit a maximum of NT$50,000 (US$1,627.40).
It said the product would be Taiwan’s answer to Alibaba’s Yuebao (餘額寶), which has attracted a massive number of deposits from Chinese consumers to become China’s largest money market fund.
Jkos declined say who would be its financial sector partner overseeing the investments, but it vowed to absorb potential investment losses to meet its obligation to users.
The product would be part of its promotional campaign to attract more users to complete real-name registrations and link their bank accounts to Jkos Pay, it said
However, the commission said that Jkos might have overstepped the boundaries of its electronic payment institution (EPI) license as the new product could be veering into banks’ territory.
Jkos is cleared to accept deposits of funds as stored value funds to facilitate payments and fund transfers between users, but EPIs cannot be used like a bank, Banking Bureau Deputy Director-General Sherri Chuang (莊琇媛) told a news conference in Taipei.
EPIs “cannot use guaranteed returns or interest income to attract users,” she said.
“Jkos told the commission that it was not working with any financial institutions, and that it is solely responsible for running the investment funds,” Chuang said.
Chuang also took issue with some of Jkos’ claims targeting rival Line Pay.
Marketing efforts should refrain from slander, she said.
Jkos said its monthly transaction volume is seven times bigger than Line Pay’s, with an annualized transaction volume of more than NT$5 billion.
“We will always be the first mover in the rapidly evolving mobile payment landscape,” Jkos Network founder and chief operating officer Kevin Hu (胡亦嘉) was quoted as saying in Chinese-language media reports.
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