A quick word on Kakao Pay. 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.
Kakao Pay recent growth
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. 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.
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.
CEO Ryu Young-jun of Kakao Pay
About the changes in the fintech market and the role of Kakao Pay in the post-COVID era
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, we will try our best to expand the non-face-to-face investment method.
Kakao Pay goes for the Wallet-Free Society
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. Since, 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, it introduced specialized financial services like integrated and credit assessments, insurance. But also, 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 Alipay and concluded a 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, it has become the largest shareholder of Baro Investment and Securities and changed name to Kakao Pay Securities. Then entered the securities industry as the first fintech company. Kakao Pay Securities started by converting money which is a prepaid e-payment method into securities account. So, providing various benefits and convenient services, and the number of accounts is now rapidly increasing.
(Over two million users are using the securities account service)
Pay and invest as the same time
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.
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.
CEO Ryu
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. And is preparing products to eliminate insurance blind spots and protect users from everyday risks.
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. With a lower barrier of entry and that can help people to be prepared for small and big risks in life.
Kakao Pay is getting global
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 is currently providing payment services 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 in if(kakao) 2020 conference on Nov. 19. Also, announced that he will work continuously to lower the inconveniences in payment with Kakao Pay to zero.
(if(kakao)2020 Conference / Finance with Peace of Mind: 01100193500) / Session by Ryu Young-jun, the CEO of Kakao Pay)
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.
Learn more on the fintech Kakao Pay on their website.