"KakaoPay Maintains 'Coin Collecting'... Anticipating Synergy with 'Fractional Stock Trading'"

Financial Services Commission: "No Violation of the Financial Consumer Protection Act"
Rising Expectations with Year-End MTS Launch

[Asia Economy Reporter Kiho Sung] KakaoPay's representative investment services, ‘Dongjeon Moogi’ (Coin Collecting) and ‘Al Moogi’ (Reward Collecting), will continue to be maintained even after the end of the Financial Consumer Protection Act (FCPA) grace period on the 24th. This is because the financial authorities have determined that the related services do not violate the FCPA. Additionally, with the scheduled launch of KakaoPay Securities' Mobile Trading System (MTS) and the introduction of ‘fractional stock trading’ by the end of this year, synergy effects are expected despite the FCPA challenges.

According to the financial sector, the Financial Services Commission recently judged that KakaoPay’s ‘Dongjeon Moogi’ and ‘Al Moogi’ services do not violate the FCPA and notified the relevant matters to the company. A Financial Services Commission official explained, "The related services have been transferred to KakaoPay Securities," adding, "The ‘Dongjeon Moogi’ service is available through KakaoPay Securities."

KakaoPay has been providing related fund investment services through its subsidiary, KakaoPay Securities. This service allows investment in funds using leftover change (Dongjeon Moogi) or rewards (Al Moogi), enabling small-amount investments that have been popular among younger generations. The financial authorities have recently emphasized compliance with the FCPA and reviewed whether the related services violated the law.

The financial authorities reported that KakaoPay clarified through an application (app) user interface (UI) overhaul that fund investments are conducted via KakaoPay Securities, and therefore decided not to impose restrictions on the service.

KakaoPay, which had experienced ups and downs due to the FCPA, has now taken a big sigh of relief. It is also expecting synergy effects from the upcoming ‘fractional stock trading’ scheduled for the end of this year. The Financial Services Commission recently improved the system to allow fractional trading of domestic and foreign stocks and plans to designate innovative financial services for securities firms wishing to provide fractional trading services through the Korea Securities Depository around October to November.

Fractional trading is a method that allows expensive stocks to be divided and traded in fractional units such as 0.1 shares or 0.01 shares. For example, a stock worth 1 million KRW can be split into fractional units so that it can be purchased for 10,000 KRW (0.01 shares). This enables investment in blue-chip stocks with a small amount of money, and the industry has predicted that KakaoPay Securities’ ‘Dongjeon Moogi’ investment will gain attention. KakaoPay Securities plans to participate in fractional trading in line with the MTS launch scheduled for the end of this year.

A KakaoPay official explained, "The product selection and explanation, as well as the fund investment inquiry screens, are all provided by KakaoPay Securities’ servers, and through this overhaul, consumers can intuitively recognize the sales entity." He added, "The deposit of investment funds, such as the ‘Dongjeon Moogi’ service that automatically invests the remaining amount after payment into a user-designated fund, is transferred from the KakaoPay Securities account, not from the prepaid balance of KakaoPay Money."