Naver Pay to compete against KakaoPay

By Yoon Sung-won

Naver has launched its e-commerce service “Naver Pay,” integrating online shopping, convenient payment and electronic financial transaction functions.

The nation’s leading web portal said Thursday that Naver Pay has an easy-to-use online and mobile payment function which can be linked to users’ credit or debit cards as well as their bank accounts. Users can also save mileage points from online and mobile shopping and send money between them, the company said.

“We made Naver Pay to relieve users’ inconvenience in using our services,” said Naver’s service department head Han Seong-sook said. “Naver Pay is the only service in the domestic market that includes all convenient functions in one service. We expect users will be able to experience the most convenient payment services with it.”

Naver said users can access the new service when they register their payment information such to their existing Naver account and do not need to sign up for respective online or mobile shopping malls.

Under partnership with local commercial banks, the service allows users to transfer money to others. Even when the users do not know the bank account of the receiver, they can still send money through the receiver’s Naver account or cellphone number, the company said.

Naver Pay supports three local card brands _ Samsung Card, Shinhan Card and Hyundai Card _ and is connected to five local banks including NH Nonghyup Bank, Industrial Bank of Korea, Busan Bank, Shinhan Bank and Woori Bank as of now.

Others such as KB Kookmin Card, NH Nonghyup Card, Kyongnam Bank, Lotte Card, BC Card and Hana Card will be available in July, the company said.

Naver has concentrated on building partnerships with small and medium-sized vendors since it launched the “Naver Checkout” service, the predecessor to Naver Pay, in 2009. The service has attracted over 15 million domestic users and about 50,000 affiliated vendors. With the mobile payment function became available, the number of affiliated vendors reached 53,000 this month, the company said.

To strengthen financial security, Naver said it will operate a complaint center around the clock and work with financial institutions and the cyber bureau at the National Police Agency to prevent financial fraud.

Fierce competition looming

With the launch of the integrated e-commerce service, Naver’s competition with Daum Kakao, the operator of the nation’s top mobile messenger KakaoTalk, will expand to the e-commerce sector.

Daum Kakao launched its convenient payment service dubbed “KakaoPay” in September. Based on the 380 million domestic users of KakaoTalk, the payment service has attracted more than 4 million users as of this month. Unlike Naver, Daum Kakao provides mobile financial transaction services through a separate application “BankWalletKakao.”

Expectations are that the two companies will put aggressive actions to lure more users in the domestic market.

“Whereas Daum Kakao has rapidly attracted users for KakaoPay on the back of its robust user base from KakaoTalk, Naver is considered to have more know-how in operating e-commerce services it learned from its online shopping research service,” an industry source said.

“The two are likely to come out with more aggressive measures to attract customers and lure more people from each other.”