"Lee Dong-cheol's Digital Innovation Success"... KB Kookmin Card to Launch 'KB Pay' Next Month

KB Pay aims for launch on next month's 15th
Expanding financial services including remittance and currency exchange

[Asia Economy Reporter Ki Ha-young] KB Kookmin Card will launch 'KB Pay,' an upgraded version of its mobile application 'KB Kookmin App Card,' next month. This is the first time at the financial group level that a simple payment platform allowing participation from affiliates as well as external institutions is being established. Attention is focused on whether KB Pay can create a new wave in the simple payment market, which is currently dominated by big tech companies such as Kakao Pay and Naver Pay.

According to the card industry on the 16th, KB Kookmin Card is in the final stages of testing and system development, aiming to launch KB Pay on the 15th of next month. A KB Kookmin Card official said, "We are in the process of reorganizing the KB Kookmin App Card into KB Pay," adding, "It is characterized by expanding available financial services such as payments, remittances, and currency exchange, thereby enhancing customer convenience."

This project has been led by President Lee Dong-cheol of KB Kookmin Card since it was selected as the top priority business at the financial strategy meeting earlier this year. Since his inauguration, President Lee has consistently emphasized digital innovation, investing 100 billion KRW over two years to build a next-generation IT system last September. In this year's New Year's address, he stressed comprehensive innovation covering both core and new businesses, ordering to "secure a solid differentiation in digital competitiveness."

KB Pay is a simple payment platform expanded from the existing app card. While the app card simply registers credit card information on mobile devices, KB Pay plans to include all services of KB Financial Group affiliates. Services such as domestic and international remittances, currency exchange, Pointree, gift certificate points, and partner membership linkage will be added to KB Pay. Based on this scalability, synergies among KB Financial Group affiliates in banking, insurance, and securities are expected.

Furthermore, KB Pay will be available to users who are not KB Kookmin Card customers. To this end, it is being developed as an open platform that allows linking bank accounts from other financial group affiliates or registering credit cards from other card companies.

President Lee Dong-cheol Leading Digital Innovation

As the payment environment digitalizes and online payments increase, the simple payment market is rapidly growing. According to the Bank of Korea, the average daily usage amount of simple payments in the first half of this year was 213.9 billion KRW, an increase of 23.1 billion KRW (12.1%) compared to the previous period. This is the first time the average daily usage amount has exceeded 200 billion KRW. The number of transactions also increased by 50,000 (8.0%) to 7.31 million daily transactions.

Lee Dong-cheol, President of KB Kookmin Card

Competition in the simple payment market is fierce. Not only big tech companies like Kakao Pay and Naver Pay but also distribution companies such as SSG Pay and Smile Pay have entered the market. To survive among numerous simple payment services, it is essential to enhance customer convenience and increase customer participation. As a latecomer, KB Pay is evaluated to have competitiveness in offline channels, which have been pointed out as weaknesses of existing simple payment platforms. While Naver and Kakao have about 500,000 merchants, KB Kookmin Card has about 2.6 million merchants.

An industry official said, "The key for KB Pay to survive in the simple payment market is how many customers it can secure," adding, "Providing various services as well as participation from external institutions is inevitably important."