- Used by 3,500 people, 3/4 of the economically active people in Korea
- Drastic growth to 3Q transaction of 17.9 tril won due to prolonged COVID pandemic
- Effort to expand the non-face-to-face investment as a fintech leader
- Using technologies such as AI and machine learning to lead the Asian market
Currently, the world economy
is in turmoil due to the prolonged COVID-19 outbreak. However, IT, content, and
bio companies located in Pangyo did well in domestic and overseas markets, and
this gives hope to related industries and many startups. In this issue, we
looked at Kakao Pay's major activities in 2020, showing their real skills and
making amazing achievements even in harsh conditions.
As the demand for non-face-to-face payment
increased due to the pandemic, the sales of Kakao Pay located in Pangyo also soared. Kakao Pay's transaction amount in the
first half of this year reached 29.1 trillion won, and the transaction amount
of online payments in 2Q increased by more than 67% YoY. Kakao Pay's financial
service transaction amount recorded three times higher YoY and 49% higher QoQ.
Also, Kakao Pay's 3Q transaction amount of this year recorded 17.9 trillion
won, which is an increase of 38% YoY.
CEO Ryu Young-jun of Kakao Pay
said, "Amid the increasing preference for non-face-to-face payment methods
due to the prolonged COVID, Kakao Pay is now widely used not only online, but
also in affiliated franchise stores and overseas, and the payment transaction
amount increased by 72% compared to the same period last year." About the
changes in the fintech market and the role of Kakao Pay in the post-COVID era,
Ryu said, "Due to the low interests in banks accelerated by the spread of
COVID-19, the financial market is changing from saving money in banks to
investing, and the needs for non-face-to-face transactions are also increasing.
As the leader that opened the fintech market in Korea, Kakao Pay will try its
best to expand the non-face-to-face investment method."
Kakao Pay is a fintech
subsidiary of Kakao, launched in April 2017 that has led the transition to the
"wallet-free society" where economic activities can be carried out anytime and
anywhere with a smartphone. Especially since 2014 when the mobile simple
payment system was first launched in Korea, it has achieved remarkable growth
by providing innovative life finance services that relieve the inconvenience of
conventional financial activities such as online and offline payments,
remittances, membership, bills, and authentication.
Starting with investment
services in November 2018, Kakao Pay introduced specialized financial services
like integrated and credit assessments, insurance, and loan comparisons in
2019, expanding its business areas to provide open financial services to
anyone. Also, in February 2017, it attracted a 200-million-dollar investment from
Ant Group, the parent company of the global payment platform Alipay and
concluded the strategic partnership. It is now forming various cooperation in
securing growth engines in the Korean market, laying a bridgehead for overseas
expansion, and developing the mobile financial ecosystem.
In February this year, it has
become the largest shareholder of Baro Investment and Securities, changed the
company name to Kakao Pay Securities, and entered the securities industry as
the first techfin company. Kakao Pay Securities started with a new idea of
converting Kakao Pay money which is a prepaid e-payment method into securities
account, providing various benefits and convenient services, and the number of
accounts is now rapidly increasing.
(Over two million Kakao Pay users are using the securities account service)
Along with this, it opened five carefully selected fund products in the Kakao Pay Investment service to diversify its portfolio of investment products, and it is making a new wave of adventurous investment by "collecting coins," which automatically invests in the designated funds with the remaining change after payment, and "collecting eggs," which invests rewards received after payment.
CEO Ryu said, "In the long
term, based on Kakao Pay's big data and AI technology accumulated through
various services, we are planning to expand the user-centered investment
service with new investment solutions and advisory asset allocation services
that can help users with less investment experience to obtain profits with fun
and ease. Moreover, we are also thinking about non-face-to-face-based
innovative asset investment service by using robo-advisors."
In addition, Kakao Pay is
preparing to establish a digital non-life insurance company based on the
country's best techfin technology and platform influence with Kakao, and is
preparing products to eliminate insurance blind spots and protect users from
everyday risks. Kakao Pay is planning
to introduce products to eliminate insurance blind spots and protect users from
everyday risks by making a digital non-life insurance company. On the
other hand, Kakao Pay acquired stakes in the insuretech platform startup INBYU
in July 2019 and secured management rights, laying the groundwork for entering
the insurance industry. Since the launch of the insurance service in October
2019, it has been introducing reasonable insurance products like travelers'
insurance, sports insurance, and mobile phone insurance that have a lower
barrier of entry and that can help people to be prepared for small and big
risks in life.
With this, Kakao Pay started
supporting payment services in the Apple App Store for the first time as a
simple payment service last year, and it is currently providing payment
services through Kakao Pay at overseas affiliates such as Google Play, YouTube,
Ali Express, and iHerb. CEO Ryu added, "We plan to continuously expand online
and offline affiliates so that users can use various financial services with
Kakao Pay alone."
To create synergy between the Kakao community, Kakao Pay is pursuing cooperative work by opening up various possibilities. In May, it cooperated with Kakao Bank to streamline the account linking process and started linking "Easy Account Link" and "Asset Management" for integrated management of financial assets. CEO Ryu delivered the changes in the financial life and future directions that Kakao Pay has made in "if(kakao) 2020" conference on Nov. 19 and announced that he will work continuously to lower the inconveniences in payment with Kakao Pay to zero.
He ended the interview by saying, "Kakao Pay has a development culture that pursues openness and sharing, horizontal communication, suitability of the staff in charge, autonomy, and diversity, and we are striving to find talented people. Kakao Pay's innovative corporate culture DNA is being developed by talented developers who are qualified, who can communicate, and who are willing to work with colleagues to solve problems. This is the growth engine that Kakao Pay can sustain new challenges."
(if(kakao)2020 Conference / Finance with Peace of Mind: 01100193500) / Session by Ryu Young-jun, the CEO of Kakao Pay)
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