Naver Pay, currently the top player in the simple payment market, is gaining an advantage over its competitors, Kakao Pay and Toss. In the previous year, Naver Pay was the first of the four main payment systems, which include Naver Pay, Kakao Pay, Kakao Pay, and Toss, exceeding an impressive $29 billion (40 trillion won) in transaction volume. Analysts suggest that Naver’s strategy, which includes offering generous customer rewards alongside its infrastructure as a competitige shopping platform, has been highly effective for the fintech company.
According to data submitted by the Financial Supervisory Service to the office of Rep. Kim Han-kyu of the Democratic Party of Korea, the total amount of online and offline simple payments (excluding simple remittances) through Naver Pay was $32.5 billion (43.4684 trillion won) last year. Last year, Kakao Pay’s payment volume was $19.1 billion (25.546 trillion won), outpacing Naver Pay which marked $13.4 billion (17.9218 trillion won).
In 2019, Naver Pay processed payments worth $1.3 billion (1.8305 trillion won) through its simple payment service, while Kakao Pay processed payments worth $5.3 billion (7.1309 trillion won), making Kakao Pay the more popular service. However, in the following year, the simple payment volume of the two companies reversed, and the gap between them has been widening ever since.
Toss’s payment volume grew nearly ninefold from $554 million (740.9 billion won) in 2019 to $4.8 billion (6.524 trillion won) last year, but it still lags behind Naver Pay and Kakao Pay with less than $7.4 billion (10 trillion won) in one-year volume.
In terms of transaction volumes, Naver Pay has experienced the strongest growth. Comparing the year of 2019 and 2023, Naver Pay’s transactions increased by 16 times, from 80.79 million to 131.288 million. Kakao Pay also saw significant growth, nearly tripled from 411.57 million to 1.1 billion transactions over the same period. Toss experienced a ninefold increase in transactions, from 27.44 million to 251.32 million, although it still cannot match its two strong rivals, Naver Pay and Kakao Pay.
The fintech industry analyzed that Naver, a giant portal site, has easily taken the lead in the convenience payment market by synergizing its shopping platform business and convenience payment service. Naver expanded its scope into the shopping industry by launching the open market ‘Shop N’ in 2012. In 2014, Naver opened the ‘Storefarm’ (now Smart Store) service to become a full-fledged shopping platform. As of June last year, the number of Naver Smart Store shopping malls was more than 570,000. While Kakao Pay and Toss had to enter into direct or indirect payment partnerships with the third-party online shopping malls, NAVER Pay could easily be partnered with its parent company’s smart stores.
