Kakao Pay in talks to acquire SSG.COM’s SSG Pay and Gmarket’s Smile Pay

Kakao Pay Corp., the mobile payment and digital wallet service unit of South Korean tech giant Kakao Corp., is in advanced negotiations to acquire two mobile payment units of retail giant Shinsegae Group to reshape the country’s fast-growing digital payments sector.

According to people familiar with the matter on Sunday, Kakao Pay is in talks with Shinsegae Group’s flagship affiliates Shinsegae Inc. and E-Mart Inc. to acquire SSG Pay operated by SSG.COM and Smile Pay run by E-Mart unit Gmarket Inc.

The deal is estimated at about 500 billion won ($365 million).

The acquisition, if successful, would consolidate Kakao Pay’s position in the Korean mobile payments market, where it competes head-to-head with Naver Corp.’s Naver Pay and Toss Payments, operated by Viva Republica Inc.

SSG Pay and Smile Pay boast a significant customer base – more than 25 million users combined – transaction volumes that could enhance Kakao Pay’s status in the segment.

SHINSEGAE IN THE MIDDLE OF UNLOADING NON-CORE ASSETS

For Kakao Pay, the acquisition would serve as an opportunity to bolster its user base and expand merchant relationships in both the retail and online marketplaces, paving the way for new financial products across Shinsegae’s consumer ecosystem.

The M&A move is part of a broader restructuring effort by Shinsegae Group, which is seeking to offload non-core assets to strengthen its balance sheet.

The group previously had negotiations with Viva Republica, a leading Korean fintech unicorn and operator of mobile financial super app Toss. Discussions, however, fell through late last year. At the time, the deal was estimated at some 700 billion won.

Korea’s digital payments market is expanding rapidly.

According to the Bank of Korea, total transaction volume through simplified payment services reached 959.4 billion won in 2024, up from 875.5 billion won in 2023 and 761.4 billion won in 2022.

Electronic financial service providers, including Kakao Pay, account for nearly half that total transaction volume, with more than 40 licensed operators competing in the space.

Separately, SSG.COM said in a regulatory filing on Friday that it will split off its SSG Pay division to create a new entity, Platinum Payments.

Write to Eun-kyung Song at norae@hankyung.com

In-Soo Nam edited this article.