Mobile Wallet
The release of the mobile money transfer service based on mobile messaging platform KakaoTalk has been delayed. At first, Kakao expected to introduce the Bank Wallet during the first half of this year, but it is likely to not be launched until September at the earliest. The delay is attributable to the fact that deliberations on the security of the system started later than expected.
According to sources in the financial sector on July 20, the Financial Supervisory Service (FSS) is deliberating on the security of Kakao's Bank Wallet. An official at the financial regulatory authorities said, “It took a long time to decide on who will be in charge of the case, since it is the first time to launch a mobile money transfer and payment service in partnership with banks, the Korea Financial Telecommunications & Clearings Institute, and a mobile messenger service provider.” The official added, “After the FSS was selected to deliberate on whether or not the new service is secure, the regulatory body is working on the case as requested by the KFTC.”
Given that it usually takes one to two months to finish the deliberation, the service is likely to be introduced in September. Nevertheless, some in the industry think that the deliberation might be delayed. As in the case of the decision on who is in charge of the deliberation, the FSS is expected to be very careful about the deliberation as well, since it is the first time for the financial regulator to discuss whether or not a mobile money transfer service is secure.
Observers say that the possibility that the Bank Wallet Kakao will be a target for various online banking fraud imposes a big burden for the FSS, because 98 percent of smartphone subscribers use KakaoTalk.
Some say that if the service is launched, it will not receive as positive of a consumer reaction as initially expected.
A source in the credit card industry remarked, “Banks, credit card companies, and large retailers recently released mobile money transfer services, but there is no dominant player.” The source concluded by saying, “It is uncertain whether or not KakaoTalk's mobile money transfer system will exert any leverage in the traditionally-conservative financial payment environment.”