Daum Kakao, one of the largest Internet companies in South Korea, has launched a mobile payment platform called BankWalletKakao as it addresses concerns about its ability to grow in international markets. Daum Kakao was formed last month by the merger of Daum, one of South Korea’s largest Internet portals and search engines, with Kakao, the maker of KakaoTalk, South Korea’s most popular messaging app.
Daum Kakao’s chief rivals include Naver, South Korea’s top Internet portal and the maker of KakaoTalk competitor Line, which is reportedly considering its own mobile payment system.
BankWalletKakao is currently available on Android and iOS in Korea, where Daum Kakao has partnered with the Korea Financial Telecommunications and Clearings Institute (KFTC), a non-profit that oversees interbank payment systems, and 16 Korean banks to allow consumers to connect the service with their ATM cards, facilitate bank transfers, and make online payments. To take advantage of BankWalletKakao, users link their account to an online bank account or Bank Money account (a chargeable virtual account operated by the KFTC and 13 domestic banks).
BankWalletKakao is the second mobile payment service launched by Daum Kakao in the past few months. In September, it rolled out KakaoPay, which allows KakaoTalk users to pay for e-commerce products and services through the messaging app. Since launching two months ago, KakaoPay has scored 1.2 million user sign-ups. Like Line and WeChat, KakaoTalk aspires to be more than just a messaging app—it also allows users to play games (mobile gaming is one of Daum Kakao’s core businesses), shop, listen to streaming music, and read news.
The launch of BankWalletKakao is significant because it is the latest step in Daum Kakao’s attempt to move beyond its core businesses, including mobile gaming, KakaoTalk, and Daums Internet portal. The combined company has decided to describe itself as a “global mobile lifestyle platform,” and its mobile payments platform (which Daum Kakao claims is easier to use than similar products like Apple Pay, Alipay, and PayPal) can potentially rope more users into its ecosystem.
Though it is currently available only in South Korea, expanding BankWalletKakao into other markets may help Daum Kakao’s international growth potential, an issue that has concerned investors especially since KakaoTalk faces stiff competition overseas from alternatives like Line, WeChat, WhatsApp, Viber, and Facebook Messenger. BankWalletKakao gives Daum Kakao a product that doesn’t revolve around the growth of the messaging app for its success.
BankWalletKakao is also an online-to-offline play: it can be used at several offline retailers in Korea. These stores currently include CU. E-mart, 7-Eleven, and department stores Shinsegae and AK department stores.