The Financial Investment Services and Capital Market Act is aimed at promoting financial innovation and competition through advanced regulatory reform to eventually form a competitive capital market. It also contains an article allowing financial investment firms to provide payment and settlement services such as settlement, remittance and deposit and withdrawal on demand through their customer accounts. Specifically, this sets up a legal basis for the firms to join the retail payment systems through the firms`representative financial institution and an agency bank. Now securities firms provide their customers with payment services of a similar level to those banks provide to their own customers by entering into contracts with banks about virtual banking account. But this method has involved not only some restrictions on available service hours and coverage but also conflicts over service charges between parties to the contract. In order to reduce those inconvenience, the draft legislation would allow financial investment firms to participate in retail payment systems. But the proposal poses a number of problems. Above all, it would undermine the current principle of preventing infringement of other financial institutions`turfs among banks, securities firms and insurance firms because it would actually enable financial investment firms to handle demand deposits. Securities firms`direct provision of payment services to their customers is not expected to achieve its desired goals such as fostering competitiveness of financial investment firms, reducing the service charges levied on financial investment firms and attracting inflows of cash balances held by household, while it might be confidently expected to increase the service charges imposed on customers. In addition, it will cost Korea Securities Finance Corporation(KSFC) and individual securities firms a large amount of money to develop and maintain new electronic devices and in-house systems. Unnecessary social costs will occur as a result of the rising settlement risk to the retail payment systems. Accordingly, the implications suggested by this paper are as follows. First, thorough reviews of the principles which restrict corporate firms`holding of bank stocks above a certain ceiling and prevent infringement of other financial institutions`turfs among banks, securities firms and insurance firms should be conducted before discussing the issue officially. Second, decisions should be made considering comprehensively such factors as the risk management system and the settlement practices of financial investment firms because it is hard to say whether having financial investment firms deal with payment services is directly related to improving competitiveness.