Expansion to MMF
A Daum Kakao executive said on Nov. 19 that his company was considering a money market fund (MMF) as its new fintech business model to follow the Kakao Pay payment service and Bank Wallet Kakao remittance service.
“We believe our MMF business will be viable enough, on the condition that Bank Wall Kakao gets on the right track, and products similar to the Yuebao of Alibaba will be made available on the Kakao platform,” he explained, adding, “Collaborations are probable because banks and financial companies have the asset management capability and Daum Kakao is capable of easily understood descriptions.”
The Yuebao is a type of short-term investment product that provides 6 percent interest for deposits left over from shopping. The product is marketed by Alibaba and the money is handled by asset management firms. It was released in June last year, and has attracted more than 100 trillion won (US$89.9 billion) since then.
As of now, there is no legal obstacle against Daum Kakao’s MMF sale. However, it still has to be approved by financial authorities. At present, companies engaged in fund sales and asset management have to have a collective investment license, and those so entrusted have to obtain the license for financial product sales beforehand.
“Worries about incomplete fund contracts have not disappeared completely, and we need to be very strict on the approval,” said the financial authorities, continuing, “It is still too early to ponder the permission, and we will not handle the issue until Daum Kakao makes an official request.”