Ant Financial Pushes into South Korea with Kakao Pay Investment

February 23, 2017         By: Steven Anderson

It was only just a few weeks ago when we heard about Ant Financial’s $880 million acquisition of MoneyGram and its push into the United States that resulted from it. Now, a smaller but still substantial deal has come into play and Ant Financial has put $200 million into Kakao Pay, a financial interface for one of the biggest chat interfaces in South Korea.

Though Kakao Pay doesn’t exactly exist yet—it’s one of those “coming soon” products—the new infusion of investment capital should help speed the process along. Given that Kakao Talk, which serves as the chat interface, counts about 48 million users to its credit, which is actually most of the smartphone users in South Korea, the end result is a potentially massive chunk of new users.

That makes Ant Financial’s expertise just as valuable as its investment; Ant already knows how to handle payment services for large numbers of users and can thus help smooth out some of the rough spots. Plus, when Chinese citizens go into South Korea for vacations and the like, a payment system will already be waiting for these travelers to put to use.

Reports also note that Kakao would like to step up its financial technology offerings, going so far as to include things like lending options and large purchase financing. This would almost make it a complete online bank, and though that’s not so strange these days it’s certainly an ambitious goal.

Speaking of ambition, it’s Ant Financial that’s showing it in spades. It’s perfectly reasonable on the surface, but between this investment, the MoneyGram buy, and the various other investments Ant Financial’s been making in Thailand’s AscendMoney, India’s massive PayTM operation, the Philippines’ Mynt, and Singapore’s M-Daq, it would be easy to think that Ant Financial is trying frantically to make itself a global enterprise.

Granted, if this is just about giving vacationing Chinese a familiar option no matter where they go, it does make a note of sense. There’s also something to be said for diversification; a Chinese firm is subject to the ups and downs of the Chinese economy; a multinational firm can average out all the ups and downs of the planet. This may be a great move for Ant Financial, if all goes as planned.