[Big Tech, Big Change] Naver Certificate Trend... Evolution of the 'Chorok Whale'

<8>Certificate Gamechanger

1.2 Million Issued in One Year
Kakao Pursuit, Aggressive Marketing
Synergy with Electronic Document Services
ID-Linked Login Service Also Available

[Asia Economy Reporter Boo Aeri] Office worker Kim Min-ki (43) recently paid his resident tax through Naver. After obtaining a Naver certificate, Kim checked the bill and proceeded with the payment via the application (app). The Naver certificate is issued after logging in and completing a mobile phone identity verification process, and users can set a password using their fingerprint. Kim said, "In the past, I had to obtain a public certificate and remember the password, but now the process has become much simpler." Three months after the full revision of the Electronic Signature Act, which abolished the 'official' status of public certificates, the market landscape is changing. Private certificates issued by private companies now hold the same status, and following Kakao, Naver is gaining attention in the private certificate market.

◆Expansion of Certification and Billing Services= According to Naver on the 27th, the number of issued 'Naver Certificates' has surpassed 1.2 million. This achievement was reached within one year since the service launched in June last year. As a latecomer, Naver is conducting aggressive marketing, such as holding events where users who obtain certificates can win 1 million won in Naver Pay points by lottery. They aim to leverage their portal competitiveness to catch up with early players like Kakao.

Above all, Naver is seeking synergy by combining the certificate with its 'electronic document service.' The electronic document service allows Naver users to receive bills from public institutions and financial institutions through the app. To view the bills, users must verify their identity via the Naver certificate. Naver delivers electronic bills to users through partnerships with the Ministry of the Interior and Safety, Seoul City, and others. The number of local tax bill deliveries via Naver has increased fourfold compared to the previous year, and property tax bill deliveries have increased elevenfold, showing rapid growth. Naver is also preparing to launch a national pension service bill within the year.

Kakao, which entered the market early in 2017, is also formidable. KakaoPay certification is used by over 100 companies and public institutions, including Samsung Securities for online shareholder meeting voting authentication. In response, Naver plans to expand its business through collaborations with financial institutions such as banks and insurance companies, as well as general enterprises. Currently, Naver certificates are used for insurance subscriptions with insurers like Meritz Fire & Marine Insurance and DB Insurance Direct. Naver plans to add certificate functionality to its 'Login with Naver ID (Nealo)' service to expand its user base. 'Nealo' is a service that links Naver IDs to external websites, allowing users to access them without separate membership registration, with about 30,000 participating sites. Naver leader Oh Kyung-soo stated, "By launching 'Naver Certificate Login' equipped with the 'Naver Certificate,' we will be able to provide login and authentication with a higher security level."

◆Naver Eyeing the Golden Goose= Naver has entered the certification business in earnest because of the market's significant growth potential. According to industry sources, the electronic certificate market is worth around 70 billion won, but if a company secures a leading position, it can not only earn commission revenue but also expand its business model by integrating various services.

Regarding the 'electronic billing service' using certificates, the Korea Internet & Security Agency (KISA) forecasts that the industry will grow from the current 93.9 billion won to 2.1 trillion won by 2023. Information obtained through certificate services in future data businesses such as MyData could become a significant asset for Naver. Jung Yoo-shin, dean of the Graduate School of Technology Management at Sogang University, said, "Since Naver has the most powerful search engine, its growth potential in the certification field is greater than other companies. When engaging in the certification business, various data are acquired, and Naver has the know-how to analyze, process, and handle such information. Over time, it will gain more influence."