SEOUL -- Kakao Pay, the online digital payment platform of South Korea's web service giant Kakao, will arm itself with upgraded services to attract users and overcome competition in the fintech market, such as an offline credit card payment service and a one-stop secondhand goods trade and delivery service.
Last year, Kakao Pay allowed users to use registered debit cards at offline stores, but the service was shunned by consumers because it did not support credit cards. Kakao Pay CEO Ryu Young-joon told reporters on Monday that he would test operate its offline credit card service later this year at home and in other countries including Japan.
"With the systematic expansion of services and organic connectivity, we will strengthen the position of our financial platform, which is readily available," Ryu said, adding Kakao Pay would partner with a credit card company for payment linkage.
Kakao Pay was launched in 2014 as a digital payment feature of Kakao Talk, South Korea's most widely used smartphone social media messenger service. It gained popularity among smartphone users as Kakao Pay provided quick and easy payment at online and mobile shopping malls with simple bio authentication methods or simplified six-digit passwords.
While Kakao Pay focused on the e-commerce market, Samsung Electronics has targeted both online and offline stores with Samsung Pay, a digital payment feature built into Samsung smartphones. About 1.4 million people use Samsung Pay, which accounted for about 80 percent of all offline digital payment transactions, according to the Financial Supervisory Service.
Other fintech services including Toss, operated by Viva Republica, are also busy in the online banking service market. Launched in 2015, Toss, a total mobile banking service targeting consumers who want a one-stop mobile banking service, has about 10 million users and provides combined mobile banking services as well as other financial services such as insurance and loan matching services.
Kakao Pay will also upgrade its platform to provide tailor-made insurance services. Users will be able to cherry-pick insurance coverage plans and combine them into a single plan. For South Korea's 20 trillion-won online secondhand customer-to-customer (C2C) market, Kakao Pay will integrate the logistics service into its platform through cooperation with Lotte Global Logis, the logistics wing of the Lotte Group.
"We will be able to provide better value to our customers using our good payment and transaction platform," Kakao Pay COO Lee Jin said, adding people who trade secondhand goods had to face inconveniences because transaction and logistics services were separated. Customers could reserve, pay and search for secondhand goods in an app while Lotte Global Logis takes charge of delivery.
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