Kakao Bank utilizes ecosystems to lead online payment

Tinuku ~ Kakao wants to lead the market in online payment using Kakao Bank. Internet company established in 2014 and headquartered in Jeju City hopes Kakao Bank will dominate the online payment market by utilizing strong mobile ecosystem. The chief executive said on Tuesday they will collaborate with other internet company networks to realize this mission.

Tinuku Kakao Bank utilizes ecosystems to lead online payment

Kakao that operates the Kakao Talk messaging app says online payments using Kakao Bank will start operating officially later this month. They built a consortium covering Korea Investment Holdings, Kookmin Bank, eBay and Tencent Holdings.

Kakao Bank is South Korea's second specialized internet bank and will focus on expanding online banking services in the early stages, but co-CEO Yun Ho-young says it will eventually launch an "app-to-app" payment service.

The payment service allows users to make payments without using credit card company's financial network. Customers pay using Kakao Bank applications, buyers and retailers also save the fees that are usually charged by credit card companies.

"Currently we are raising number of customers and outlets, we are planning to launch payment services. For future, people will think of an application just like opening a bank account. Kakao Bank will be the most needed bank in the future," said Yun.

The first Internet-specific bank in the country is K-Bank led by KT telecommunication company and began operations in April. The growth rate of deposits and loans of K-Bank is much faster than projection.

K-Bank aims to attract 500 billion won (US$434 million) for 2017 with a target of 400 billion won. Last month, K-Bank hit the target of deposits and loans for the full year.

Kakao Bank says it will make a breakthrough into credit card market next year and credit card information from customers will be crucial for mobile services. Currently has capitalization of 300 billion won, Korea Investment Holdings and Kakao hold 58 percent and 10 percent share in Kakao Bank.