Naver continues to beat Kakao in fintech

A user makes a payment with Naver Financial's mobile payment service, Naver Pay. Courtesy of Naver

By Park Jae-hyuk

Naver appears to be a step ahead of rival Kakao in their fierce competition to take the lead in the nation's fintech industry.

According to industry sources, Naver Financial will be licensed to provide small deferred payment services, which allow users to make deferred payments of up to 300,000 won ($270), following the Financial Services Commission's (FSC) regular meeting scheduled for Thursday.

The deferred payment service has not been allowed for mobile payment service providers so far, but the regulator decided recently to lift the ban temporarily until lawmakers revise relevant laws.

The mobile payment subsidiary of Naver is expected to launch the service in April.

In contrast, Kakao's mobile payment subsidiary, KakaoPay, did not apply for the license, despite news reports that the company was considering launching the service to make it easier for its users to pay for public transportation.

“It was quite surprising because we encouraged fintech firms to apply for the small deferred payment license during a meeting earlier this year,” an FSC official said. “KakaoPay seems to be making more efforts to win the MyData license at this moment.”

KakaoPay has yet to win preliminary approval for a MyData license. In contrast, Naver Financial and 27 other companies won licenses last month to receive their customers' credit information from conventional financial firms, so that users can access all of their financial information in one place.

Financial authorities are requesting documents on punishments and sanctions against Alipay Singapore Holdings, the second-largest shareholder of KakaoPay with a 43.9 percent stake.

Because the documents were not submitted to regulators by the deadline, KakaoPay temporarily stopped its asset management service utilizing its user data, Feb. 5.

This was in stark contrast to Naver Financial, which came up with a credit management service recently based on the MyData license.