[Click eStock] Kakao Enters Securities Industry... KakaoPay Business Expansion Gains Momentum

[Asia Economy Reporter Oh Ju-yeon] KB Securities analyzed that Kakao's fintech ecosystem will be further strengthened through the acquisition of Baro Investment & Securities, following its services in payment, remittance, and internet-only banking via KakaoPay and KakaoBank.

On the 5th, the Financial Services Commission announced through a press release that it has given final approval for the change of major shareholder of Baro Investment & Securities to KakaoPay. KakaoPay plans to acquire 60% (2.04 million shares) of Baro Investment & Securities and change its name to 'KakaoPay Securities.' The business operations of Baro Investment & Securities include securities brokerage, collective investment securities trading (excluding underwriting), and debt securities trading.

Researcher Lee Dong-ryun of KB Securities explained, "Based on the subscriber base of KakaoTalk, the largest messenger platform in Korea, KakaoPay surpassed 30 million cumulative subscribers and 20 million Monthly Active Users (MAU) as of 2019, and recorded a transaction amount of 12.9 trillion KRW in the third quarter of last year." He added, "It provides various services in payment, finance, and B2B sectors, standing out particularly in simple payment (KakaoPay) and remittance services."

Lee said, "Kakao has pursued a 'super app' strategy offering key services including KakaoPay within the KakaoTalk app, but in the process of actively expanding KakaoPay's business area, it launched KakaoPay as a separate app in May 2019, expecting to significantly expand direct services from the existing partnership-centered revenue model." He further predicted that with KakaoPay obtaining a securities business license, it will rapidly expand into mobile-based B2C business areas such as CMA, MMF, and stock trading.

He also evaluated, "With the ability to receive deposits and pay interest, KakaoPay Money charging will be activated, facilitating smooth capital inflow." He added, "Regarding financial products, it will be able to launch its own products directly, moving beyond the existing model of sourcing products from other securities firms."

Researcher Lee forecasted, "Leveraging Kakao's strength in customer big data, it is expected to provide various customized products and services," and anticipated, "As the proportion of low-margin businesses such as payment and remittance, which involve marketing costs and fees, decreases, the profit and loss structure is also expected to improve."

This content was produced with the assistance of AI translation services.