KakaoPay 'MyData' Suspension D-1... Naver Surges Ahead

Kakao Pay to Suspend MyData-Related Services from the 5th
Naver Financial Launches 'Naver Pay Credit Management' Service

[Asia Economy Reporter Kang Nahum] The fortunes of the two major big tech companies, Naver Financial and Kakao Pay, are diverging. While Kakao Pay, which failed to obtain the full permit for the MyData (Personal Credit Information Management) business from financial authorities, is facing a crisis of service suspension and faltering, Naver Pay is taking a step forward by launching a credit management service.

According to industry sources on the 4th, as the MyData business has shifted to a licensing system, Kakao Pay, which did not pass the review, must suspend related services from midnight on the 5th. Specifically, these include ▲ asset management services such as integrated inquiry functions for banks, cards, investments, insurance, loans, and cash receipts ▲ financial report services providing information based on banks, cards, cash receipts, and investments ▲ bucket list services with booster functions based on card and cash receipt information ▲ receipt services including today's usage details ▲ and some functions of insurance management services related to insurance subscription history inquiry.

A Kakao Pay official stated, "We are inevitably suspending some of the currently provided services temporarily and are informing users," adding, "We will prepare various measures to minimize customer inconvenience."

The issue with Kakao Pay in the MyData business license review was the 'major shareholder eligibility.' The review considers various factors such as capital, security systems, business plans, and expertise, but Kakao Pay was hindered by a regulation that suspends the review if a shareholder holding 10% or more of voting rights (major shareholder) is under sanctions or involved in ongoing litigation. The Financial Supervisory Service inquired with the People's Bank of China about whether Ant Group, Kakao Pay's second-largest shareholder, had any history of sanctions locally but did not receive a clear response.

Kakao Pay's side feels somewhat unfair. The People's Bank of China discloses all sanction details on its website, but there is no information related to Ant Group, and it is also unclear whether Ant Group falls under the jurisdiction of the People's Bank of China.

On the 27th of last month (U.S. local time), the Wall Street Journal (WSJ) reported that Ant Group submitted a business restructuring plan to Chinese authorities to transform into a financial holding company. Financial holding companies, which have financial companies as subsidiaries, are subject to strict management and supervision by Chinese financial authorities. Kakao Pay has maintained the position that since Ant Group was not a financial holding company, it is difficult to consider it under the jurisdiction of the People's Bank of China.

While Kakao Pay's indefinite wait continues, its biggest competitor, Naver Financial, has partnered with NICE Information Service to launch the ‘Naver Pay Credit Management’ service.

By using this service, users can check their individual credit scores as well as detailed reports analyzing the reasons behind the scores. They can compare their credit scores and card payment amounts with those of similar age groups, submit non-financial information to increase their credit scores in real time, and comprehensively diagnose and manage their credit status. Plans are also in place to introduce credit management-linked services such as loan information available and comparisons of the lowest interest rates.

An industry insider said, "Since the number of Naver Pay users reaches 35 million and a significant portion overlaps with Kakao Pay users, the newly launched credit management service could serve as an opportunity to increase usage frequency."

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