South Korean mobile messenger giant Kakao said Tuesday its simplified mobile payment service unit Kakao Pay has secured $200 million in investment from the financial arm of China’s Alibaba Group, a move that broadens the scope of the two firms’ services.
Kakao said it has struck a partnership with the Hangzhou-based Ant Financial Services Group, under which Kakao Pay will be synchronized with China’s widely used Alipay to allow subscribers of both services to use both systems.
As part of the partnership, Ant Financial has agreed to invest $200 million in Kakao Pay Corp., to be spun off as a subsidiary of Kakao in early April.
The new partnership connects Alipay-linked shops worldwide -- starting with some 34,000 merchants in Korea -- to Kakao Pay users for making online payments, Kakao said.
Further details on how this service synchronization will take place has yet to be determined, a Kakao spokesperson said. Kakao plans to publicize more details after Kakao Pay officially becomes an independent company in April.
The merging of Alipay and Kakao Pay is set to allow Kakao Pay users to easily make payments on Chinese online shopping mall Alibaba as well as Alipay-linked shops in the future, Kakao said.
Kakao Pay is a simplified mobile payment service in which users register their credit or debit cards and make financial transactions by entering only a passcode, skipping the digital certification process.
Used widely across China, Alipay offers similar simplified mobile payment services. Under the platform, payments are instantly settled by scanning a barcode linked to a user’s bank account.
Kakao Pay Corp. CEO-elect Ryu Young-joon (Kakao)
“The combination of Ant Financial’s global payment platform Alipay and numerous financial and commerce service networks and Kakao’s platform capabilities will result in more effective and convenient financial solutions for both businesses and consumers,” said Kakao Pay’s CEO-elect Young-Joon Ryu.
By Sohn Ji-young (email@example.com