Kakao Pay Corp. is negotiating to acquire two mobile payment services from retail giant Shinsegae Group for approximately 500 billion won ($365 million), according to people familiar with the matter.
The deal would give Kakao Pay control over SSG Pay and Smile Pay, which together serve more than 25 million users across Shinsegae’s e-commerce platforms and retail network. The acquisition represents Kakao Pay’s latest attempt to consolidate its dominance in South Korea’s fiercely competitive digital payments sector, where it currently holds the largest market share.
Shinsegae is seeking to offload non-core assets to strengthen its balance sheet as part of a broader restructuring effort. The retail conglomerate previously selected fintech startup Toss as the preferred bidder in 2023, but those negotiations collapsed in April 2024.
The potential transaction highlights the challenges facing smaller payment platforms in Korea’s saturated market. Kakao Pay accounts for 42.4 percent of total digital payment transactions, followed by Naver Pay and Samsung Pay at 24 percent each, leaving limited room for independent operators to achieve sustainable profitability.
For Kakao Pay, the deal would expand its merchant relationships and customer base, particularly in retail and e-commerce. However, the premium valuation suggests the company may be paying handsomely for market share in a segment where growth rates are already decelerating due to market saturation.
SSG.COM filed on Friday to split off its SSG Pay division to create a new entity, Platinum Payments, potentially streamlining the transaction structure.
