Parent firm's lawsuit casts doubt on JKoPay's business

Taipei, July 11 (CNA) The operations of JKoPay, one of Taiwan's major digital payment firms, have been thrown into uncertainty after multiple platforms and companies suspended their cooperation with the service following a recent court ruling against its parent company.

On Friday, E-life Corp. announced on Facebook that it would no longer use JKoPay. Later, major e-commerce platforms such as PChome, Shopee, and momo also dropped JKoPay as a payment option, followed by a herbal product company and a breakfast chain.

This wave of dissociation from JKoPay came a day after police officers executed a court-ordered seizure of assets belonging to its Taipei-based parent company, JKO FinTech Co., to enforce a NT$3.6 billion (US$123.24 million) claim at the request of Taisun Enterprise Co.

Despite the parent company's problems, JKoPay said its finances were not affected by the court's action.

At a press conference in Taipei on Friday afternoon, JKoPay Chairperson Mei Hua (梅驊) and General Manager Clair Fann (范庭甄) acknowledged that the incident had sparked concern, but insisted that the company's operations remained unaffected by the asset seizure.

Citing the Act Governing Electronic Payment Institutions, Mei said JKoPay operated independently from its parent company and that all funds involved in its services are 100 percent held in trust.

That means that JKoPay users can still fully withdraw funds from their digital wallets, and payment collection and disbursement services will not be frozen or seized.

In response to a question from CNA, the Financial Regulatory Commission (FSC) later echoed Mei's remarks, saying that JKoPay's assets are under the agency's supervision and would not be affected by the district court's ruling against its parent company.

According to data compiled by the FSC, JKoPay ranked second in terms of digital wallet users in 2024, with 6.62 million -- around 70,000 short of iPass Money -- while leading Taiwan in total payment volume.

The Taipei District Court ruled in May that Taisun's 2023 acquisition of a 40-percent stake in JKO FinTech was invalid. The ruling ordered that JKO FinTech return NT$3.6 billion -- the value of the shares -- plus 5 percent annual interest to Taisun.

At the time of the transaction, Taisun was undergoing a leadership transition, and then-chair Chan Ching-chao (詹景超) approved the purchase despite internal controversy and opposition by selling the company's highly profitable shares in FamilyMart, one of Taiwan's two largest convenience store chains.

Although JKO FinTech refused to accept the court's decision, Taisun filed a motion requesting that the company be ordered to report its assets by a set deadline, leading to Thursday's enforcement action.