Top 5 Financial Groups Launch Integrated Payment Platform
Targeting Rapidly Growing Simple Payment Market
MyPayment Secures Future Growth in Comprehensive Payment Services
[Asia Economy Reporter Ki Ha-young] In the rapidly growing simple payment market, while big tech companies such as Naver and Kakao are dominating, financial groups are also launching counterattacks by building integrated payment platforms based on card company simple payment platforms. The competition for platforms to check the rapidly expanding influence of big tech and expand their customer base is intensifying.
According to the industry on the 7th, the five major domestic financial groups?KB Kookmin, Shinhan, Woori, Hana, and NH Nonghyup Financial?have all started building integrated payment platforms. They aim to create a group-wide integrated payment platform involving all affiliates based on card company simple payment services, and ultimately develop it into an open platform that other financial company customers can also use.
The fastest to take action was KB Financial Group. KB Kookmin Card launched 'KB Pay,' the first integrated simple payment system by a domestic financial holding company, last year. KB Pay allows payments not only with credit and debit cards but also with accounts, gift certificates, and points. It supports mobile payments at offline merchants via Magnetic Secure Transmission (MST) and Near Field Communication (NFC). Within this year, they plan to link services with non-life insurance, savings banks, securities, and expand the platform to an open system.
Shinhan Financial Group introduced 'Shinhan Pay' last month, upgrading the existing Shinhan Card application 'Shinhan Pay Fan' into a simple payment platform. The service scope was expanded so that not only card customers but also those with Shinhan Bank accounts can use simple payment services through account linkage. Shinhan Financial plans to extend account sharing targets beyond subsidiaries such as securities, Jeju Bank, and savings banks to regional banks as well.
Simple Payment Amount Grew 41.6% Last Year
Woori, Hana, and NH Nonghyup Financial plan to build group integrated platforms within this year. Woori Financial Group is creating an open integrated payment platform based on Woori Card's 'Woori Pay.' They plan to introduce MST payments to Woori Pay and gradually apply services such as payments from other bank accounts. Already, Woori Card added 10 banks besides Woori Bank to the Woori Pay account payment service launched in January. Additionally, Woori Pay will be implemented in Woori Bank's smart banking app, One Banking.
Hana Financial is preparing to link 'One Q Pay,' operated by Hana Card, with all affiliates. They plan to launch in November a group integrated app that covers not only payment functions but also digital customer center functions and membership features for merchants and Hana Financial Group members. NH Nonghyup Financial Group plans to develop 'NH Pay' (tentative name), a financial group integrated payment service, aiming for release in August.
The reason financial groups are rushing to build simple payment platforms is the steep growth of the simple payment market. According to the Bank of Korea, the average daily number of simple payment service transactions last year was 14.55 million, with a usage amount of 449.2 billion KRW. These figures represent increases of 44.4% and 41.6%, respectively, compared to the previous year. Naver Pay, Kakao Pay, and Coupang account for 65.3% of the usage amount in the simple payment market, an overwhelming share. Based on platform versatility, big tech companies are expanding their influence in the payment market, which has long been monopolized by the financial sector.
An industry insider said, "The key to the success of integrated platforms is ultimately versatility," adding, "Financial companies are building integrated platforms aiming for the lock-in effect of versatile platforms."
Another industry insider said, "Competition between financial holding companies and big tech to secure simple payment customers is expected to become even fiercer," adding, "Beyond simple payments, building integrated platforms is important to secure customers and gain an advantage in future growth areas such as My Payment and comprehensive payment services."
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