At the end of February, the Financial Action Task Force (FATF) announced that South Africa had been greylisted. This put South Africa in the company of countries such as Syria, Haiti and Mozambique. When the news was first announced, many South Africans were extremely confused about what the news meant.
The FATF is an intergovernmental body that sets global standards to combat money laundering and terrorist financing. The decision is a signal to global financial institutions that South Africa is not fully compliant with anti-money laundering and terrorist financing standards.
During the budget speech delivered by finance minister Enoch Godongwana a few days before the FATF’s decision, he mentioned that South Africa might be at risk. The minister said: “Addressing the FATF issues is part of the broader fight against corruption, crime, state capture and the deliberate weakening of the institutions of law and order in our Country. The FATF Plenary will make its decision later this week on whether or not to put South Africa under increased monitoring, otherwise known as greylisting. We should be prepared for that possibility.”
The president Cyril Ramaphosa said the government had a plan to deal with the FATF’s decision. He also said the “financial stability and costs of doing business with South Africa would not be seriously impacted by the greylisting”.
However, despite the government’s words and assurances, the greylisting has affected South Africans already. Melissa is a South African working in South Korea as a teacher. She told The Daily Vox that she did not think it would affect her and so soon as well.
@melissalimes All Kakao services are affected – I can’t use Kakao bike, you can’t register an automatic payment, I think Kakao taxi is still available if you pay by card after your trip. So many serious implications with this for payments etc. If you had money in your Kakaopay account you’ll have to call for a refund. This is terrible. Not sure which other countries are affected. #southafrica #saffainkorea #koreatiktok #expatinkorea #kakaopay #lifeinkorea #?? #southafricatiktok ? original sound – ice spice
However, during the first week of March, she had been trying to book an electric bike called the KakaoBike and she got a message saying there was no payment method linked. She found that strange as her Korean bank card was connected to it. When she logged into the account, she found out her KakaoPay which is South Korea’s version of ApplePay was not connected.
She then messaged the South Africans in South Korea group to find out if anyone else was also having an issue. From the group, she found out about the greylisting issue. A message had been sent saying that all customers of non-FATF compliant countries would be unable to use KakaoPay.
Melissa said while she had heard a little about greylisting, she didn’t think it would affect her and she didn’t know what the implications would be.
“In a selfish way, I thought that whatever was happening in South Africa wouldn’t directly affect me. The thought didn’t cross my mind that something that is basically happening back home, so many kilometres away would be affecting me in South Korea,” Melissa said.
The message she and other South Africans received mentioned that if you are from a country that has been greylisted, you cannot use KakaoPay. The only way you would be able to use it is if you have a Kakao bank account which is not open to foreigners.
“The messaging was basically telling us that if your country was greylisted, you cannot use KakaoPay,” said Melissa. This is a major issue for all South Africans living in South Korea as KakaoPay is a platform that is used for everything in South Korea. Melissa said it’s used for membership programmes, for online shopping, coupons and discounts.
“It’s such a huge loss,” Melissa said. She also is afraid the greylisting might affect other payment methods used in South Korea like NaverPay amongst others.
“It’s already so hard for foreigners here to be able to access services like that because our names are different from Korean names,” Melissa said.
@melissalimes Replying to @Lolababy Ramaphosa said “it’s not that bad” but look at us now…suffering in Korea after just 3 days. Expect other payment systems to follow suit. What I don’t get yet is why it should affect us when it’s our Korean cards connected…very weird ? #southafrica #saffainkorea #saffasabroad #koreatiktok #expatinkorea #kakaopay #lifeinkorea #greylisted #fatf ?? #southafricatiktok ? Boy’s a liar Pt. 2 – PinkPantheress & Ice Spice
There was no notice or warning from either the South African and South Korean authorities. Melissa said she was scared of the quickness of the decision to removal from the platform – mere three days after the FATF’s decision.
This decision is going to affect her basic transportation needs from the electric bike to train tickets, bus tickets and taxi tickets.
“There is the problem here where taxi drivers will not pick you up if you’re a foreigner. That is kind of bypassed because you’ve already paid when your card is linked. So now we have to pay with a card, which is obviously still fine, but now it’s harder to get a taxi, and it’s a little bit more expensive,” she said. She is worried it might have an impact on a number of other payments.
No information was made available to those affected.
The South African government released a FAQ sheet which outlines what the greylisting means. The fact sheet mentions that it takes from one to three years for countries to address the deficiencies and to be taken off the grey list. The government said South Africa is expected to address the eight areas of strategic deficiencies identified by the FATF, by no later than the end of January 2025. However, they hope to address them sooner, possibly in 2024. The government is hoping to emulate Mauritius who were greylisted in February 2020 but managed to get off the list only 20 months later.
However, if South Africa doesn’t meet that deadline, the country might have to wait until 2027/2028.
Melissa said she and other South Africans in South Korea are hoping the issue gets solved sooner.
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“It doesn’t make sense. It’s our Korean bank accounts that are linked to KakaoPay. They can easily track our spending and the movement of money because when we do our taxes, they give us a complete list of everything that our cards have been used for. So that information is there. So why is it this knee-jerk reaction of let’s just kick out all South Africans?”
