Share on
Kakao Pay is one of South Korea's most widely used mobile payment services . At the end of 2024, it had 24 million monthly active users who had collectively made a total of KRW43.1 trillion (USD30.2 billion) in payments throughout the year.
As part of the Kakao ecosystem, Kakao Pay integrates with KakaoTalk, the country's most popular messaging app — enabling users to perform payments, money transfers, and financial management tasks directly through their mobile devices.
This guide provides global merchants with an overview of Kakao Pay’s features, market presence, and functionality to better understand its role in facilitating transactions in the Korean market.
What is Kakao Pay?
Kakao Pay is a mobile-based payment platform developed by Kakao Corp. It offers a range of financial services, including money transfers, bill payments, online shopping transactions, and management of financial documents. Users can also use Kakao Pay’s barcode-based membership programme with popular South Korean retailers.
Kakao Pay operates similarly to other mobile payment services, with a focus on convenience, security, and integration into daily digital activities for South Korean consumers. To set up a Kakao Pay account, you need a Korean mobile number and Korean bank account. Note that Kakao Pay functions as an e-wallet, not a digital bank.
Key features of Kakao Pay
1. Integration into the Kakao ecosystem
Kakao Pay integrates with KakaoTalk, its parent company’s messaging platform. KakaoTalk users receive notifications for utility bills and taxes due, which they can pay without leaving the app. They can also send funds to their friends.
Kakao Pay is also embedded into Kakao Games for fast in-game payments. It facilitates in-app payments on Kakao T (a ride-hailing platform) and KakaoStory (a social networking app).
2. Diverse payment methods
Users can register their credit and debit card information within Kakao Pay. To make purchases online or offline, they’ll usually enter a password or PIN. Users can also register for Kakao Pay Money, a service that enables purchases by withdrawing from a linked bank account.
- Credit card integration: Users can add credit cards to their Kakao Pay accounts for payments.
- Debit cards: As an alternative to credit cards, debit cards can also be linked to the platform.
- Bank transfers: The service facilitates direct transfers between bank accounts for payments or money transfers.
- QR code payments: Kakao Pay is primarily designed for mobile payment use, allowing customers to complete online transactions or in-store payments via QR codes or NFC technologies.
3. Cross-border payments
Kakao Pay aims to become a “global cross-border transaction system”. Its users can use the app to make QR code payments outside of South Korea without converting currency.
Through an integration with Alipay+, foreigners in South Korea can also use their local e-wallet apps to pay via Kakao Pay QR codes at retail stores. From January 2023 to January 2024, Kakao Pay transactions involving foreign tourists in South Korea increased 14x.
4. Built-in loyalty programmes
The Kakao Pay Rewards and Kakao Pay Membership programmes let users earn points and cashback when they pay at over 800,000 online and offline stores. Kakao Pay cards offer similar perks. Fund transfers may also be eligible for points collection.
5. Financial management tools
Kakao Pay goes beyond payments by offering tools for financial management, such as viewing electronic documents, tracking budgets, and managing money within the user’s account.
Users can store and manage electronic documents, such as receipts, bills, and insurance claims, through Kakao Pay's interface. This feature enhances the platform's utility beyond payments.
6. Financial services extensions
Kakao Pay offers financial services like savings and investment plans, broadening its usage in day-to-day financial management. It also offers insurance products for financial safety, mobile phones, drivers, and infants.
7. Powerful encryption
To ensure secure transactions, Kakao Pay incorporates encryption, multi-factor authentication, and biometric verification (e.g., fingerprints or facial recognition).
The benefits of Kakao Pay for merchants
1. Popularity in the South Korean market
A 2023 survey revealed that 94.6% of mobile messenger users in South Korea use KakaoTalk. The messaging platform’s popularity significantly influences Kakao Pay’s success. In fact, customers who use both KakaoTalk Pay and the Kakao Pay app generate over 2.4x more revenue than those who use the Kakao Pay app only.
Given the broad scope of the Kakao ecosystem, Kakao Pay also finds its way into South Korean consumers’ day-to-day activities, from shopping and gaming to bill payments and transport. This means millions of users are familiar with the e-wallet’s functions and use the e-wallet actively every month.
2. Payment integration
Many local businesses, both brick-and-mortar and e-commerce, have adopted Kakao Pay as a preferred payment method. Its popularity for offline uses has surged — from 2023 to 2024, the total number of offline transactions made on Kakao Pay (both in South Korea and abroad) grew by 33%, and total payment volume rose by 125%.
3. Broad addressable market
Kakao Pay’s demographic encompasses a wide age range. Customers aged 14 to 18 can use the Kakao Pay Money Card, a prepaid card that can be used for contactless payments and comes in different attractive designs. It also introduced a money loading channel for teens, which attracted 180,000 users within eight weeks of its launch.
Kakao Pay also offers a large-font interface, security features, and YouTube content targeting senior customers.
How Kakao Pay works for payments
1. Payment processes
Kakao Pay simplifies payment processes for both customers and merchants:
- Customer experience: Users link their banking cards, perform money transfers, and make purchases securely with minimal steps.
- Merchant systems: Payments are processed online or in-store through Kakao Pay's platform, with merchants receiving transaction notifications in real time.
2. Payment request flow
Merchants can initiate payment requests with Kakao Pay by providing options within e-commerce checkout pages or point-of-sale (POS) systems. Users then authenticate and authorise the payment via their mobile device.
3. Cross-border transactions
International merchants can accept Kakao Pay payments from users in South Korea by integrating the app into their online stores. A payment solutions provider like Antom makes such integrations seamless and secure.
Kakao Pay has also been growing its cross-border partners. For example, it is accepted as a payment option at over 3.2 million merchants in Japan, thanks to the expanded partnership between Alipay+ and Japanese payment services (Kakao Pay is a partner of Alipay+).
Merchant integration with Kakao Pay
1. Direct integration
Kakao Pay offers integration solutions for merchants. Through APIs and plugins, businesses can connect their platforms with Kakao Pay, enabling seamless transactions for customers.
2. Compatibility for online transactions
E-commerce platforms can integrate Kakao Pay for digital transactions, streamlining the checkout experience for customers who prefer mobile payment methods.
3. Integration costs
Merchants considering Kakao Pay should evaluate potential integration expenses, which may vary by market, transaction volume, and business model.
Talk to an Antom expert to make Kakao Pay work for you
Kakao Pay is a well-established mobile payment service in South Korea that integrates the convenience of digital payments with advanced financial management tools. For merchants operating in the Korean market — or serving Korean customers internationally — it is a widely recognised payment option with scalable integration capabilities.
An Antom expert can help your business get paid faster by setting up integrations with Kakao Pay and 250 other regional payment methods. To identify the payment options that are right for you, schedule your consultation today.
