By Kim Jae-heun
Coupang has decided to separate its Payment Gateway (PG) business from the e-commerce sector and establish a new company under the tentative name of "Coupang Pay" starting Wednesday.
The online retailor giant said it will prioritize growing its online shopping business while Coupang Pay will be tasked to further strengthen its specialty in the growing fintech business segment.
The newly established entity will be led by senior director Kyung In-tae, who has been in charge of fintech business in Coupang since 2014.
"Coupang Pay will not only offer a simple easy payment system, but also develop into a comprehensive fintech platform. We are planning to launch a new unique service that only Coupang Pay can provide," Kyung said in a press release.
Coupang's decision to separate its PG business unit reflects its strategy to move into the "easy payment" market. Easy payment systems allow customers to purchase items online by only inserting a password or biometric authentication; finger print or face. Coupang's payment service requires neither and allows for purchases to process automatically with a credit card registered to the account.
Coupang had some 10 million registered members of its fintech service as of June last year and it is the third biggest player in the local market. Customers' information will also be used for artificial intelligence programs and big data operated by Coupang.
Coupang Pay is aiming to challenge Samsung Pay, Kakao Pay and Naver Pay in the easy payment segment.
According to the Bank of Korea (BOK), the easy payment market has grown by 44 percent to transact 174.5 billion won online on a daily basis compared to that from a year ago. The payment system has now expanded its business area to money transfers too and the volume of business has soared by 124.4 percent on a daily basis compared to last year.
Offline retailors such as Lotte Shopping and Shinsegae are also in the process of rebuilding their easy payment system. Lotte Shopping has begun to entice its L Point members to use its easy payment system through its mobile application.
Shinsegae also separated its PG business from Shinsegae I&C, which focuses on the information technology sector, and combined it with SSG.com, an online e-commerce firm.
An industry source said Coupang is currently adopting its easy payment system for its main e-commerce business and Coupang Eats delivery service but it will soon make its service available with other e-commerce firms to raise funds.
"Coupang is currently preparing to go public and it needs to deviate from deficit operation. Like Coupang Fulfilment Service that separated itself from the main body and turned into a profit-making firm, Coupang Pay can also build up its business separate from Coupang and receive investment individually," the source said.
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| Coupang Pay CEO Kyung In-tae / Courtesy of Coupang |
The online retailor giant said it will prioritize growing its online shopping business while Coupang Pay will be tasked to further strengthen its specialty in the growing fintech business segment.
The newly established entity will be led by senior director Kyung In-tae, who has been in charge of fintech business in Coupang since 2014.
"Coupang Pay will not only offer a simple easy payment system, but also develop into a comprehensive fintech platform. We are planning to launch a new unique service that only Coupang Pay can provide," Kyung said in a press release.
Coupang's decision to separate its PG business unit reflects its strategy to move into the "easy payment" market. Easy payment systems allow customers to purchase items online by only inserting a password or biometric authentication; finger print or face. Coupang's payment service requires neither and allows for purchases to process automatically with a credit card registered to the account.
Coupang had some 10 million registered members of its fintech service as of June last year and it is the third biggest player in the local market. Customers' information will also be used for artificial intelligence programs and big data operated by Coupang.
Coupang Pay is aiming to challenge Samsung Pay, Kakao Pay and Naver Pay in the easy payment segment.
According to the Bank of Korea (BOK), the easy payment market has grown by 44 percent to transact 174.5 billion won online on a daily basis compared to that from a year ago. The payment system has now expanded its business area to money transfers too and the volume of business has soared by 124.4 percent on a daily basis compared to last year.
Offline retailors such as Lotte Shopping and Shinsegae are also in the process of rebuilding their easy payment system. Lotte Shopping has begun to entice its L Point members to use its easy payment system through its mobile application.
Shinsegae also separated its PG business from Shinsegae I&C, which focuses on the information technology sector, and combined it with SSG.com, an online e-commerce firm.
An industry source said Coupang is currently adopting its easy payment system for its main e-commerce business and Coupang Eats delivery service but it will soon make its service available with other e-commerce firms to raise funds.
"Coupang is currently preparing to go public and it needs to deviate from deficit operation. Like Coupang Fulfilment Service that separated itself from the main body and turned into a profit-making firm, Coupang Pay can also build up its business separate from Coupang and receive investment individually," the source said.
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