One Day Before Public Certificate Abolition... Kakao and Pass Battle for the Throne of 'Gukmin Certificate'

[Asia Economy Reporter Bu Aeri] "This year's year-end tax settlement via KakaoTalk?" Starting from the 2020 year-end tax settlement to be implemented early next year, private certificates will be allowed instead of the public certificate. With the abolition of the public certificate, which caused inconvenience due to complicated procedures after 21 years, the 'war for the throne' to secure the position of the 'National Certificate' has also intensified, centered on information and communication technology (ICT) companies such as the three major telecom companies, Naver, and Kakao. The amendment to the Electronic Signature Act, effective from the 10th, eliminates the superior status of the public certificate and makes it a 'joint certificate' without distinction from private certificates.

KakaoPay and PASS Authentication Surpass 20 Million

According to the industry on the 9th, KakaoPay Authentication and the three telecom companies' PASS are relatively leading players in the current authentication market. They have secured users based on 'KakaoTalk' and 'mobile telecommunications,' which are used by the entire nation. Unlike the public certificate, which was inconvenient for users due to difficult usage and storage, their simple procedures and easy accessibility are strengths.

KakaoPay Authentication, which first entered the market in 2017, surpassed 20 million cumulative issuances as of December. The number of institutions using KakaoPay for authentication, such as the Korea Transportation Safety Authority and the National Pension Service, has exceeded 200. KakaoPay Authentication is targeting the authentication market with 'simple procedures.' Its biggest weapon is the national messenger 'KakaoTalk.' Once a certificate is issued through KakaoTalk, users can use this certificate to log in or verify their identity at KakaoPay authentication partner institutions. Unlike the existing public certificate, there is no need for complicated program installation or security card authentication procedures.

The cumulative issuance of PASS certificates, launched by the three telecom companies in April last year, also exceeded 20 million as of the end of November. Currently, about 100 institutions, including NH Nonghyup Bank, use PASS as a simple authentication method. PASS emphasizes convenience by allowing certificate issuance within one minute through a 6-digit PIN or biometric authentication such as fingerprint. Naver, which entered the market in March as a latecomer, has aggressively expanded its business by leveraging its 'portal competitiveness.' Naver's certificate currently has a cumulative issuance of 2 million and 47 partner institutions. This is a sevenfold increase compared to the early days of its launch. A Naver official said, "The number of user institutions is expected to exceed 60 within the year. We expect tenfold growth next year."

Competition to Secure Year-End Tax Settlement

ICT companies have entered the private certificate market because the amendment to the Electronic Signature Act has made the certificate business a 'goose that lays golden eggs.' Although the electronic certificate market size is about 70 billion KRW, securing the market allows not only fee revenue but also the expansion of business models by integrating various services. For example, the 'electronic notification service' using certificates is expected to grow from the current 93.9 billion KRW to 2.1 trillion KRW by 2023.

ICT companies particularly view the 'year-end tax settlement' as an important turning point. Since the year-end tax settlement targets the entire population, showcasing their authentication service there can secure a favorable position to dominate the market. The Ministry of the Interior and Safety is expected to announce the final operator for the 'project to expand electronic signature adoption in the public sector' around the 20th. Currently, Kakao, PASS, NHN Payco, KB Kookmin Bank, and Korea Information Certificate are selected as candidate operators. Kakao plans to provide authentication services through a 'wallet' embedded in KakaoTalk, operating separately from the KakaoPay authentication service.

If selected as the final operator, from January next year, they will provide authentication services on major government websites such as the National Tax Service, Ministry of the Interior and Safety, and Anti-Corruption and Civil Rights Commission. Starting with the year-end tax settlement, authentication services can be provided on platforms like the People's Petition and Government24.

Experts predict that certificates that secure public and financial institutions will dominate the market. Professor Choi Kyung-jin of Gachon University said, "Until now, the certificate market was divided and shared, but now 'platforms' have started to enter," adding, "The operator who controls public and financial institutions will ultimately hold an overwhelming position in the authentication market."

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