[Market Focus] Kakao Pay Surges on Hopes for Gains from Stablecoin Introduction

As of 9:40 a.m. on June 9, Kakao Pay shares were trading at 46,050 won on the Korea Exchange, up 20.87% from the previous trading day's closing price. This surge appears to be driven by heightened expectations for the expansion of the payments market, following the new government's move to introduce a Korean won-based stablecoin. Previously, Kakao Pay's stock price had also soared at the end of last month after news broke that the company was seeking to acquire SSG Pay and Smile Pay, the easy payment services of Shinsegae Group.

Kakao Pay is a comprehensive lifestyle financial platform that offers a wide range of financial services, including payments, remittances, investments, insurance, and financial product brokerage. Its main businesses are broadly divided into payment services, financial services, and other services. In the payment services segment, the company earns fees from the use of its easy payment system. In the financial services segment, it generates revenue through fees from loan brokerage, securities trading, and insurance sales. In the other services segment, revenue is recognized through card recommendations and advertising.

There are projections that platforms such as Naver, Kakao Pay, and Toss will have an advantage if a Korean won-based stablecoin is actually introduced in the future. Stablecoins, which are based on blockchain technology, can significantly reduce payment fees compared to traditional credit cards and bank transfers. For service providers, the cash turnover rate could become much faster than before. In addition, foreigners who have difficulty opening bank accounts would be able to use these services easily, and international remittance fees are also expected to be much lower than current levels. As a result, there is analysis that fintech platform companies will be able to quickly secure a dominant position in the market. In the case of Kakao Pay, the company is also expected to pursue various overseas business expansions through its partnership with Alipay, its second-largest shareholder in China.

Meanwhile, its subsidiary Kakao Pay Securities has also contributed to the positive outlook, as it recorded its first quarterly profit since its launch in 2020 in the fourth quarter of last year, driven by an increase in overseas stock trading, and continued to post a profit in the first quarter of this year.