Coupang announced the spin-off of its payment service platform Coupang Pay to advance its fintech business. The company expects the fintech subsidiary to offer payment services in the first half of this year.
South Korea’s top e-commerce platform operator separated its Coupang Pay fintech business with the hope of providing innovative fintech services. The company expects to offer its services to a broader range of users while enhancing the experience for its existing customers.
Kyung In-tae, Coupang’s senior director for the fintech business, would lead the wholly-owned separate entity. Kyung took charge of Coupang’s easy payment system technology since 2014.
CouPay currently has 10 million registered users making the bulk of the transactions on Coupang’s shopping platform last year. Coupang said that customers mostly use CouPay’s one-touch payment system. The payment option allows the user to buy products without the need to scan their fingerprints or enter a password.
Transactions on Coupang’s shopping platform hit a record high in March, with a total of 1.63 trillion won ($1.32 billion). According to SK Securities, virus infection prevention methods such as social distancing and community quarantines contributed to the increasing use of e-commerce platforms.
Last year, Coupang’s total transactions reached 13 trillion won ($10.6 billion).
CouPay enables customers to pay transactions with their registered bank accounts or cards quickly. The fintech business grew fast thanks to its convenient service, rivaling other fintech platforms such as Samsung Pay and Smile Pay.
Industry experts foresee that the payment system could later compete with the top two services Naver Pay and Kakao Pay. As the top e-commerce platform in South Korea, Coupang hopes CouPay also to reach a membership of 30 million.
In 2017, Kakao separated its fintech business named Kakao Pay. The company then acquired Kakao Pay Securities to concentrate its efforts on the financial platform business. South Korea’s largest internet portal operator, Naver, also demerged Naver Pay CIC. The internet giant then established Naver Financial to accelerate its ventures into the financial industry.
Kyung said that the Coupang Pay would offer more innovative and convenient financial services to its customers. The new fintech company would evolve into an integrated fintech platform from an easy payment service.