Naver Financial seen as beneficiary of 'anti-Google law'

An illustration depicting the methods of payment for in-app purchase on Google Play / Courtesy of Google Play

Kakao Pay silent about regulation on in-app billing system

By Park Jae-hyuk

Naver Financial, which operates the internet portal's Naver Pay mobile payment service, has been viewed as one of beneficiaries of the National Assembly's passage of the world's first law aiming to ban Google and Apple from forcing consumers to use their own in-app billing systems when downloading apps and contents.

In contrast to rival Kakao Pay, which can be used for in-app purchases on Google Play, Naver Pay has not been among the methods of payment for in-app purchases on the U.S. tech giant's app store, although Naver is said to have once talked with Google regarding their partnership.

This has been attributed to the rivalry between Naver and Google in the search engine and other markets. Moreover, the former could have been forced to share part of its profits from Naver Webtoon and VIBE music service with the latter, unless lawmakers pass the regulation on the global app store operators.

Under these circumstances, a Naver official said the company has supported the Korea Internet Corporations Association's efforts to prevent Google from using its own in-app billing system intended gain dominance over the market.

The association, which has served as a lobby group for ICT companies here, has emphasized that the domestic fintech industry will wither if the government fails to prevent the U.S. tech giant's plan.

“Such a plan could have dealt a severe blow to mobile payment service providers that fail to be chosen by Google,” a representative from the association said. “The new law will enable fair competition among fintech companies, because app market operators will not be able to force the use of specific payment methods.”

The representative added that there will be no impact of the new law on Kakao Pay and PAYCO, both of which have been among the methods of payment for in-app purchase on Google Play.

A Kakao Pay official declined to comment on this issue.

The Korea Fintech Industry Association, which has mobile payment service providers and other fintech firms as members, said that it has not discussed the issue with its constituents. The association's incumbent leader is Kakao Pay CEO Ryu Young-joon.