"KakaoPay Lands in 'Mobile Payment Paradise' China... 100x Growth in 5 Months"

Kakao Pay, which launched a simple payment service targeting Korean tourists in China, is showing rapid growth. The convenience of being able to use the existing Kakao Pay app without installing a separate app in China, where cash and credit card payments are difficult, along with the extensive merchant network of Alipay Plus, a local partner, played a key role.

On the 18th, Shin Won-geun, CEO of Kakao Pay, held a press briefing for correspondents in Beijing, China, stating, "Through word of mouth among merchants and users, the number of users (MAU) in China increased 108 times, and the number of payment transactions increased 193 times within five months since the payment service started in China in August. The payment amount also grew significantly by 1,263 times."

On the 18th, Shin Won-geun, CEO of Kakao Pay, held a press conference for correspondents in Beijing, China, explaining the payment service market. (Photo by Hyunjung Kim)

Since 2018, Kakao Pay has been conducting practical discussions related to services with China's Alipay. In March, it completed integration testing to enable payments at Alipay Plus merchants throughout China. While Alipay is a payment service for Chinese users, Alipay Plus is a customized service and merchant network established with a separate service and fee structure for overseas users. This service integration means that Koreans can make payments using the existing Kakao Pay app without installing a separate app at tens of millions of Alipay Plus merchants in China. Apart from minimal financial transaction information, users’ personal information is not shared with the partner Alipay Plus.

Kakao Pay does not exclusively share Alipay Plus’s merchant network. Naver Pay has also completed payment service integration, and Ant Group, which operates Alipay, recently made a 100 billion KRW investment in Toss, becoming its second-largest shareholder. It is expected that various business agreements and integrations will be possible in the future. Regarding this, CEO Shin explained, "Kakao Pay has been a partner from the network design stage of Alipay Plus," adding, "When Chinese travelers using Alipay visit Korea, they will in turn use the Kakao Pay merchant network." He further added, "We intend to build an even closer collaborative model with Alipay Plus."

In terms of payment fees, it is also explained that it is advantageous to users compared to existing card payments. CEO Shin emphasized, "Reasonable currency exchange fees and fees paid to payment network providers are charged," adding, "Although I cannot specify details, the fees are more competitive than credit card payments."

Kakao Pay is the only domestic simple payment service that has established an inbound overseas payment environment allowing foreign tourists to pay with overseas simple payment services at Kakao Pay merchants when visiting Korea. It has completed or is promoting technical integration with major Asian country payment operators accounting for about 80% of visitors to Korea, including Alipay (China), GCash (Philippines), Touch 'n Go (Malaysia), TrueMoney (Thailand), Tinaba (Italy), and PayPay (Japan), connected through the Alipay Plus network. At the same time, it is focusing on expanding QR infrastructure so that small business owners can benefit from the tourism boom.

The initial service performance is also not bad. As of the second week of September, the average daily number of payment transactions at Kakao Pay merchants by Chinese tourists visiting Korea increased by nearly 50% compared to a month earlier. It is expected that if more tourists enter following the allowance of group tours in China, it will contribute to increased sales at domestic merchants.

CEO Shin said, "Our goal is to enable payments with Kakao Pay at more than 80% of payment locations in China within this year," adding, "It is a good opportunity to grow the market itself together with competitors."

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