The competition among the three major domestic simple payment systems, including Naver Pay, Kakao Pay, and Toss (Viva Republica), is expanding into overseas markets. In particular, while they focused on growing the domestic simple payment market during the COVID-19 pandemic, the end of the pandemic has resulted in a surge in demand for overseas travel, prompting payment companies to focus on increasing overseas transaction amounts this year.
According to the simple payment industry on the 27th, Toss identified expansion into overseas markets as one of its three main goals during a 10th-anniversary press conference held the previous day. To this end, Lee Seung-gun, CEO of Toss, noted the aim of having about half of Toss users be foreigners within the next five years. Toss plans to go public this year and aims to expand the use of QR simple payment and facial recognition payment, holding a vision of becoming a financial super application for people worldwide. Although Toss was the last of the three companies to enter the overseas payment market, it has rapidly grown, allowing payments in a total of 56 countries, matching Naver Pay (66 countries) and Kakao Pay (56 countries).
Naver Pay recently disclosed its overseas QR payment growth rate through its annual year-end report for last year. Starting from last year, Naver Pay began supporting GLN International and WeChat Pay transactions, in addition to existing UnionPay and Alipay Plus. The number of available countries and regions has also expanded to 66. Notably, comparing the transaction amounts in September 2023, when the Naver Pay overseas QR payment service began in partnership with UnionPay and Alipay Plus, to the transaction amounts from September last year, there was a 7.7-fold increase.
Kakao Pay, the first among the three to open the door to overseas payments, is also accelerating its expansion into foreign markets. Kakao Pay is the only domestic simple payment fintech company providing the 'inbound overseas payment' service for foreign tourists visiting Korea. It allows local customers utilizing international payment systems like Alipay or PayPay to make payments at Kakao Pay merchants in Korea without requiring additional app installation or registration. Kakao Pay plans to enhance its overseas payment competitiveness by collaborating with travel platforms such as Agoda and Hana Card.
The foreign expansion of simple payment companies is due to the limits of growth in the domestic payment market. Additionally, as pent-up travel demand continues following the pandemic, the demand in the overseas payment market has also increased. Unlike credit card companies targeting the overseas payment market with travel cards offering free currency exchange services, simple payment companies have opted to expand their services through partnerships with local firms.
In particular, in East Asia and Southeast Asia, including China and Japan, QR payment culture has already become more widespread than in Korea. Thus, the three companies focus on cooperation with local payment networks and merchants. When domestic users make simple payments at stores that accept overseas payments, the payment barcode is automatically converted to the overseas payment for that country, eliminating the need for separate registration or currency exchange processes and enhancing convenience.
To attract more overseas customers, simple payment companies have been actively conducting promotions since last year. Especially in countries where QR payments are common, they are strengthening their positions by offering discounts and cashback benefits when using their services for payments. An industry official noted, 'Since last year, competitive promotions targeting international tourists have been activated among simple payment companies, and it is expected to be fierce this year as well,' adding that 'payment companies are focusing on establishing payment networks not only in large merchants such as local convenience stores and supermarkets but also in smaller ones frequented by travelers.'