KakaoTalk Prepares Money Transfer Service

The lure of the promising mobile payments industry is expanding into social networking companies as the popular Korean messaging service KakaoTalk prepares to launch a small-sum money transfer service in June (up to 100,000 won or $97) in cooperation with local banks.

KakaoTalk has higher aspirations: one high-ranking banking official commented, “Once security problems are resolved so that payments and transfers over 100,000 won are possible and local banks expand the payment infrastructure via smart phones, we will live in an era where all we need is a smart phone when we leave home.”

While we’ve heard this near technotopian call for a world of digital wallets before, the move to bring globally popular social networking service (SNS) companies into the burgeoning mobile payments realm is a powerful move, bringing the vast swaths of users to a simple, in-house mobile payments system.

The potential is there, since KakaoTalk reports having 100 million users.

KakaoTalk isn’t the only SNS company developing a money transfer service.

Facebook is in the midst of preparing a money transfer service in Europe. More specifically, the firm seeks regulatory approval in Ireland for “e-money” status, enabling it to issue digital credits convertible into cash by its recipients.

Facebook has also just acquired the extremely popular messaging service WhatsApp (for a hefty $19 billion), and according to a conference call with Mark Zuckerberg, Facebook isn’t looking to drive revenue from the app, instead he said, they are focusing on growth.

The potential for SNS services to influence and drive mobile payments is enormous, when one considers the fast ways social networks spread information and gain users, combined with the convenience of a money-transferring service included in a SNS app.