Ant Financial, the financial services affiliate of e-commerce group Alibaba, agreed yesterday to invest $200m in Kakao Pay Corp, a mobile finance subsidiary of South Korea-based internet company Kakao.
The funding will be used to launch Kakao Pay as a separate entity to Kakao. It currently provides financial services including online payment, bill payments and remittance to a customer base of more than 14 million.
Ant is providing the funding as part of a strategic partnership that will integrate the 34,000 merchants that use the firm’s local services and payment platform, Alipay, into Kakao Pay’s system, allowing them to sell goods and receive payment in South Korea.
Kakao Pay will also distribute Ant’s services in its home country where they will be available for use by Chinese visitors.
Young-Joon Ryu, CEO-elect of Kakao Pay, said: “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.
Douglas Feagin, president of Ant Financial International, added: “South Korea is an important market for Ant Financial in its global expansion, and we see many opportunities in the market for innovative services and growth in mobile payments.
“Given Kakao’s leading mobile platform offering and vast customer base, we believe we can bring Ant Financial’s broad experience in digital payments and technology-driven financial services to offer exciting and innovative products to South Korean customers.”
Ant Financial has become an active corporate venturer over the past two years, backing several domestic online services providers and stretching overseas through investments in India-based Paytm and Thailand-based Ascend Money.