November 23, 2024

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[THE INVESTOR] PayCo, a mobile payment system operated by NHN Entertainment, is securing a firm footing in the nation’s burgeoning mobile payment market, becoming a direct threat to the current No. 3 KakaoPay after top two Samsung Pay and Naver Pay.

According to industry sources on Aug. 3, PayCo saw its accumulated transactions exceed 2 trillion won (US$1.77 billion) in July, compared to KakaoPay’s 1.9 trillion won as of June.  

“PayCo’s partnership with e-commerce giant 11st Street seems to have played a key role in the surge in transactions,” an industry source told The Investor on condition of anonymity. “It is a matter of time for PayCo to outpace KakaoPay which was launched a year earlier.”

PayCo and Kakao Pay are vying for the third spot in the nation’s mobile payment market largely occupied by Samsung Pay and Naver Pay that recorded more than 4 trillion won transactions each since they launched.  

Naver Pay focuses on attracting smaller merchants to join its online payment network, while Samsung Pay is appealing to Samsung phone users who can make payments at offline shops via credit card readers.

Even though PayCo is gaining pace, KakaoPay is preparing to fight back through its partnership with Alipay, China’s most popular mobile payment service. In February, KakaoPay received US$200 million funding from Ant Financial, the Alipay operator.

PayCo also plans to spend an additional 50 billion won to expand its offline network that includes convenience stores, department stores and franchise coffee shops.

In the meantime, the total transactions via mobile payment apps have reached 13 trillion won annually in Korea.

By Park Ga-young (gypark@heraldcorp.com)