The business that started with simple payment has soon expanded to a platform that provides overall financial products such as loans, investments, and insurance. In order to develop products that suit customers’ tastes, it acquired a securities company last year, and is preparing to launch a digital non-life insurance company this year. This is the story of Kakao Pay, the fifth year since its establishment.
Ryu Young-jun, CEO of Kakao Pay, is interviewing with JoongAng Ilbo at the Pangyo office in Seongnam, Gyeonggi-do on the morning of the 7th. Reporter Jang Jin-young
Kakao Pay subscribers exceeded 35 million as of the third quarter of last year. The transaction amount exceeded 47 trillion won by the third quarter of last year. The goal is to exceed 100 trillion won in transaction amount this year. Kakao Pay, which is on a steep growth trajectory, is preparing for an IPO in the first half of this year. The enterprise value expected by securities companies is 7 to 10 trillion won.
As the scale of Kakao Pay increases, it is the existing financial sector that is tense. Checks are also getting stronger. Each commercial bank is making various attempts, such as starting a delivery service to make its own app platform.
Kakao Pay CEO Ryu Young-jun, 41, who met at the headquarters in Pangyo, Gyeonggi-do on the 7th, said, “Doesn’t it mean that consumers use more banking apps just because they provide delivery services on a bank app?” It is correct to pay more attention to the inherent financial values such as consumer protection and customer value.”
- What kind of company is Kakao Pay?
- The existing financial sector sees the nature of business as risk management. Kakao Pay also sees finance as a service. First think about how the customer is most comfortable and design the service. If there is an irrational rule, it can be solved with technology, so I persuaded (financial authorities) to change the rule. It took three months to create the simple payment system, but it took a year and a half to persuade to remove the public certificate from the payment process. It can take a long time to persuade, but the moment you compromise, it becomes the same as traditional finance.
- Besides the ease of use, Kakao Pay’s unique advantages.
- Having such a question means that we made the service well. Kakao Fe makes it possible to pay with only 6 digits of a password that required a public certificate for each payment. Even with a loan alone. In the past, you had to take your documents and walk around the bank. Now, if you just press the consent button on the Kakao Pay app, each financial company first suggests interest rates and limits to users. Users just have to choose a product. The hegemony of finance has shifted from supplier-centered to consumer-centered.
The number of Kakao Pay subscribers. Graphic = Reporter Jaemin Shin [email protected]
- Existing financial sectors claim to be more regulated than fintech companies.
- The financial industry will grow only when fintech, big tech, and financial sectors are not divided and regulations are lifted as a whole. In the future, finance will have no choice but to develop non-face-to-face. When the regulations are lifted, banks and credit card companies also benefit. In the case of Korea, Internet banking was also introduced first, leading to IT, but it remained unchanged for 20 years. Didn’t you have to write a public certificate in the late 90s? Finance should deregulate and compete.
- Existing banks and credit card companies also try various services in the digital field.
- Banks can try new things, but what they do and what they do well are different. I honestly don’t know how much better the existing financial sector can do (in the digital field). If the services provided by financial companies are more beneficial to consumers than big tech and fintech, they can be chosen by consumers without making new attempts. I don’t know if consumers will use more banking apps by adding delivery services to banking apps. Rather, isn’t it right to focus more on consumer protection or customer value?
- Kakao Pay thinks of the essential value of finance.
- When using financial services, it is really helpful to me, and the most important thing is to instill in users the perception that they see me as a partner. Preliminary compensation for financial accidents also started for the first time last year. If there was an accident like voice phishing, whether it was a bank note or anywhere, did you find it all or attributed it to the customer’s fault? Kakao Pay compensates first, and if the customer’s fault is revealed, then it claims the right to remedy.
CEO Ryu is investing in all 375 personal finance (P2P) products recommended by Kakao Pay. CEO Ryu said, “If there is damage or arrears, I am investing in all products because I think that I should know first, but there is no product that has suffered arrears or losses yet.” “Kakao Pay carefully verifies products made by affiliated P2P companies. “I am looking at real estate development related products directly to the site.”
Ryu Young-jun, CEO of Kakao Pay, is interviewing with JoongAng Ilbo at the Pangyo office in Seongnam, Gyeonggi-do on the morning of the 7th. Reporter Jang Jin-young
- He directly acquired a securities company and established an insurance company.
It is not for the purpose of doing financial business directly. There are times when it is unavoidable to operate a financial company directly to create a service that gives users a differentiated experience with a financial platform. For example, the existing securities company system could not provide one-won fund investment services, so it acquired a securities company. The same goes for insurance. In the existing financial system, you can’t do more than you’ve done.
If you dare to compare it, it means that you wanted to store the products that customers wanted in a department store, but there was no place to make or supply them, so you directly jumped into product production.
The Kakao Pay Fund, which started sales in March last year, can be invested in units of 1 won without a minimum payment amount, and only some amounts can be redeemed. Currently, 3.2 million people have opened accounts, and the monthly fund investment is 8 million. CEO Ryu said, “It has become the number one securities company in Korea in less than a year based on the number of funds sold.”
- What are the areas we are considering expanding our business in the future?
- The investment, insurance, and loans prepared now are a wide area. We need to diversify and deepen products in these areas. Looking at the investment sector alone, it is preparing a function that allows direct stock investment following the fund.
Representative Ryu is a former developer who made voice talk in Kakao. Leading the Kakao Pay business in Kakao, Kakao Pay spun off in April 2017 and became the representative. CEO Ryu said, “I originally wanted to quit the company and start a business, but just as Kakao asked me to do a new business inside, I chose the financial field.” “Because Korean finance is really behind, there were many things to change.”
Reporter Ahn Hyo-seong [email protected]