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South Korea-based financial technology services company Viva Republica announced last week that it had closed a KRW 55 billion ($47 million) Series C round of funding. Among the investors in this latest round were venture capital firm Goodwater Capital and US-based payment service PayPal.
Viva Republica has found success in its home market with its peer-to-peer (P2P) mobile payment app Toss, which claims to have 6 million users in South Korea. The Nikkei Asian Review reported that Toss users transfer money via the app an average of 6.7 times per month—almost triple the average for similar services. According to data from Wiseapp, Toss was the second most used mobile payment app among Android users in South Korea in July 2016, behind only credit card company Hyundai Card.
Toss’s fast growth has been propelled by eliminating much of the bureaucracy that digital payment users face in South Korea, instead handling it on the back end for them. “Before Toss, users required five passwords and around 37 clicks to transfer $10. With Toss, users need just one password and three steps to transfer up to KRW 500,000 ($431),” said Viva Republica founder and CEO Seung Gun Lee in a statement.
In theory, mobile payment adoption should be a natural evolution for consumers in South Korea—a country that already has an incredibly well-connected population. eMarketer estimates 87.8% of the population will use the internet and 72.2% will use smartphones this year, figures that are among the highest in the world in both regards.
But mobile payments have yet to become a daily behavior among those who already use them. In a survey of mobile payment users in South Korea conducted in May 2016, the Korea Consumer Agency found that just 9.2% of respondents made a mobile payment daily. In fact, those who used such a service once a week made up the largest group of respondents, at 22.4%.
Toss’s parent company Viva Republica is not limiting itself to just processing payments. It also has plans to expand offerings to include cross-border money transfers, insurance and loan brokerage, according to TechCrunch. “Users might want to do money transfer, but by doing that in our app, they might find other services that are also valuable,” Lee told the Nikkei Asian Review.
Viva Republica’s ambitions put it in clear competition with Kakao Pay, the digital payment service offered by South Korea-based internet services giant Kakao Corp. That means Viva Republica is also going up against Alibaba affiliate and owner of Chinese digital payment juggernaut Alipay, Ant Financial, which invested $200 million in Kakao Pay just last month. The financial technology sector in Asia is now rife with competitors looking to establish themselves in a number of markets, and that trend is likely to continue through 2017.
This is the latest installment in an ongoing series of quarterly video ecosystem overviews focusing on monetization, audience, platforms and content. Our goal is to provide a summary of key developments each quarter on a need-to-know basis.
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