South Korean firm Kakao’s bid for a domestic internet banking licence is being bolstered by China’s Tencent and eBay from the US.
Kakao (formerly Daum Kakao) is the company behind South Korea’s popular messaging app KakaoTalk, and is already in mobile payments.
According to Reuters, Tencent and eBay will invest an undisclosed amount in the venture through subsidiaries. However, their stakes are expected to be 4 per cent or less in the bank should a licence be gained, a Kakao spokesman said.
South Korea is expected to award one or two licences for internet banking later this year. Kakao’s bid will face competition, with at least three bids (including the messaging firm’s) in play.
Last autumn, Kakao launched BankWalletKakao, a social network-based mobile wallet service, in partnership with Korea Financial Telecommunications and Clearings Institute (KFTC) and 16 local banks.
The service lets users of its messaging app KakaoTalk link their BankWalletKakao account with up to 25 bank cards and one virtual Bank Money account to manage fund transfers, online and offline payments and ATM cards.
The emphasis of the service is on sending cash to friends and splitting bills.
A banking licence would mark progress for Kakao’s payment ambitions. Tencent has some new-found experience in this area, having launched WeBank, China’s first private-sector internet bank, in January.
Unlike its two partners, eBay has less direct knowledge of the banking sector, not least since its split earlier this summer from PayPal.