More than 190,000 stores and vendors across South Korea accept offline transactions using KakaoPay. (image: Kakaopay Corp.)
SEOUL, Jan. 23 (Korea Bizwire) — KakaoPay Corp., a South Korean mobile payment platform, surpassed 20 trillion won (US$17.6 billion) in annual transactions last year for the very first time since its launch in September 2014.
Transaction volume jumped by more than five times compared to the previous year (US$3.35 billion).
Analysts say that KakaoPay has grown so quickly in such a short period of time due to its strategy of expanding new services such as offline payments and investments.
“KakaoPay can access all services related to transactions,” said a source from KakaoPay.
“Users can not only wire cash, but also use KakaoPay to pay offline as well as make investments, which has naturally led to exponential growth in transaction volume.”
Simply registering a card on KakaoTalk is more than enough to access all KakaoPay services including wiring transactions, online/offline transactions, authorization, billing, and investment services.
When wiring cash via KakaoPay, users are provided with practical services to ‘reserve’ a wire transfer at a certain point of time and split payments with friends.
KakaoPay also provides ‘fun’ transaction services such as ‘sprinkling’ a certain amount of cash into a certain chatroom in KakaoTalk, all of which are available only on KakaoPay.
KakaoPay’s introduction of offline payment services using QR/barcodes significantly contributed to the increase in the transaction volume, since the majority of transactions are still being conducted offline.
More than 190,000 stores and vendors across South Korea accept offline transactions using KakaoPay. The plan is to have as many as 1 million stores accept KakaoPay within two to three years.
(image: Yonhap)
KakaoPay will also participate in the Zero Pay project led by the Ministry of SMEs and Startups this March to use KakaoTalk as a platform to conduct Zero Pay transactions across all franchise stores using QR codes.
Zero Pay is a government-led project designed to support small businesses. Zero Pay users will be exempted from paying wiring fees to banks, and receive as much as 40 percent of their expenditures as income tax deductions.
The project began its test drive last December with 20,000 stores in Seoul.
KakaoPay’s investment service introduced last November can be used by purchasing KakaoPay’s online currency, KakaoPay Money.
This system also helped increase transaction volume. On the first day of its release, the investment service accumulated as much as 970 million won (US$856,890) in investment funds.
KakaoPay ‘throws out’ cash as part of its promotion strategy to attract more customers each time they release a new service.
KakaoPay recently vowed to give out 5 million won (US$4,416) to three people who pay their auto tax via KakaoPay’s billing service.
KakaoPay gave out 5,000 won (US$4.42) to all users when it first introduced the investment service.
Last November, KakaoPay gave out 10 million won (US$8,833) to 49 people who used KakaoPay to conduct offline transactions.
KakaoPay selects one wiring service user every month to receive a ‘monthly salary’. It is estimated that KakaoPay spent millions of dollars giving out cash to its customers.
As of October 2017, 20 million people had joined KakaoPay. By December of last year, the number rose to as many as 26 million members.
KakaoPay plans to introduce a new service within the first quarter of this year to allow users to make payments in Japan without having to exchange currency.
The aim is to work with China’s AliPay to set up a ‘global cross-border’ service that will allow users to conduct transactions across South Korea, China, and Japan using KakaoPay.
H. M. Kang (hmkang@koreabizwire.com)
