Value context and insight. lkm@koreatimes.co.kr
Fintechs turn profit, accelerate overseas expansion drives
Toss FacePay's facial recognition terminal is on display in Seoul, Sept. 2. Yonhap
By Lee Kyung-min
Korea’s three major fintechs — Naver Financial, KakaoPay and Toss — have turned a profit for the first time this year, market watchers said Wednesday.
Their collective strong performance was driven by rapid adoption of digital payment, platform efficiency and services powered by artificial intelligence (AI).
Some of their smaller peers are also showing strong earnings, laying the groundwork for initial public offerings and overseas expansion.
But many say policy uncertainties and market saturation remain a risk, adding that their long-term success will depend on innovation, diversification and agility in a rapidly changing financial market landscape.
KakaoPay's platform displayed on a phone / Yonhap
According to Financial Supervisory Service data, the Kakao subsidiary reported an operating profit of 4.4 billion won ($3.3 million) in the first three months of this year, a dramatic turnaround that broke 15 quarters of operating losses. Its operating profit doubled to 9.3 billion won in the second quarter.
The strong figure was led by a 35 percent year-on-year increase in in-person transactions, coupled with no significant losses related to last year’s TMON-WeMakePrice settlement failure fiasco.
Similarly, Toss, operated by Viva Republica, logged an operating profit of 83.8 billion won in the second quarter, up nearly 190 percent from 28.9 billion won a year earlier.
Toss first turned a profit in the second quarter of 2024 and has since shown steady earnings growth.
“We expect the robust performance to continue in the quarters to come. We will continue to strengthen consumer convenience and introduce products that meet the needs of our customers,” a Toss official said.
Smaller players are also strengthening growth strategies.
AI-driven fintech PFC Technologies (PFCT) signed a three-year contract with Australian financial firm Finance One to supply its AI risk management solution package, AIRPACK.
PFCT’s products based on advanced machine learning technologies will help the Australian entity with automated credit assessment, data-driven portfolio management and real-time risk modeling.
The contract is the latest in the PFCT’s global expansion move encompassing Indonesia, Vietnam and now Australia.
PFCT CEO Lee Soo-hwan said the partnership shows that Korean fintech can compete effectively in advanced global markets.
“We plan to leverage Australia’s rapidly maturing digital finance environment — including open banking and real-time payments — as a global testbed to further solidify the presence of K-fintech on the world stage.”
The partnership is significant for the Korean financial tech industry, a PFCT official said.
“Traditionally, Korean financial entities have relied heavily on imported software from the U.S. and other developed markets,” he said. “However, our successful entry into Australia — a mature financial market with robust infrastructure — marks a milestone for Korean-made AI financial technology, signaling growing global competitiveness.”