Banking without Banks
Daum Kakao has officially launched mobile money transfer service Bank Wallet Kakao, following its mobile payment service Kakao Pay. As a result, much attention is being paid to financial services provided by Kakao.
A test shows that there is virtually no difference in Kakao's mobile money transfer service and digital wallet services in signing up for an account to transfer money.
Bank Wallet Kakao enables users to transfer money just by entering a password on a mobile device, after linking a virtual account on the mobile messaging platform to their bank account.
To use the service, it is necessary to download a related app on the Google Play Store or the Apple App Store and log in to one's Kakao account. After choosing a bank that will connect to the service, people should choose between a simple type that supports mobile and online payments and a Near Field Communication (NFC)-based type that supports both online and offline payments.
SMS-based authentication is required to select a simple type. It is possible to use the simple type service, after entering one's account number, payment passwords, security card passwords, or one-time passwords in an app on KakaoTalk. When it comes to iPhone users, ARS authentication is needed as well. On the other hand, an accredited certificate is needed to register for the NFC-based type. People should apply for this service on the computer and also use their mobile phone to register.
With the simple type, users can transfer money to their virtual account by typing a certain amount of money and entering bank account passwords. Members can send money by selecting one person from their friends' list and entering the needed amount.
The daily limit on person-to-person transactions is 500,000 won (US$456.12), and money transfer fees will be waived for a certain period of time. The registration and remittance procedure is generally acknowledged to be similar to that of digital wallet services. However, Bank Wallet Kakao allows people to transfer money on the mobile messaging platform. In addition, it is possible to use money transfer services provided by banks with an app, without the need for separate digital wallet services.
There is no problem with online transactions using Kakao's mobile money transfer service, but it takes some time to liquidate the transferred money. When money is sent from one account to other, it is possible to use the money, right after money is transferred. However, when using Bank Wallet Kakao, the money can only be transferred to the bank account connected to the virtual account on KakaoTal after 12 pm the following day.
It is also more expensive to send money using the mobile money transfer service. There is no extra charge for any transaction, since the service has just been introduced. But after an introductory period, 100 won will be charged per transaction. In contrast, people are rarely charged for transactions when using online or mobile banking services, even though those services are somewhat inconvenient.
On top of that, it is not particularly convenient to charge money on Bank Wallet Kakao, either. Although it is possible to charge up to 500,000 won per day, only 300,000 won can be charged at a time. In other words, users can only hit their maximum account balance with two separate transactions, since 300,000 won is the maximum amount allowed without requiring an authentication certificate for online shopping.
On the first day of the introduction, there was no problem related to money transfers. Nevertheless, it was virtually impossible to make a payment in affiliated online stores using money on the virtual account. It was also not possible to purchase gift icons using virtual money via KakaoTalk until 3 p.m. It will be only possible to make a payment on mobile shopping service KakaoPick in the third week of November. Using virtual money online is not possible at the moment, since Daum Kakao has yet to develop a service that allows people to make a payment at online shopping malls using Bank Wallet Kakao.
Offline payment services still have a long way to go. It is possible to make an offline payment using mobile barcodes or by mobile phones using NFC, and a barcode-based mobile payments service will be made available in February of next year. Those who have NFC-enabled Android phones manufactured by SK Telecom or KT will only be able to use the NFC-based mobile phone payments service, and just one affiliated convenience store (CU) will provide the service. Therefore, offline payments services are not expected to be widely used anytime soon.