E-commerce marketplace giant eBay has been confirmed as part of a group of three companies looking to jointly receive a new internet banking license in South Korea. Led by Kakao, the operator of South Korea’s largest mobile messaging application, eBay and Chinese e-commerce company Tencent would own approximately 4% of the new entity respectively.
The bid comes after reported interest by South Korean corporations KT and Interpark for the 2 newly created banking licenses that would allow each company to offer more significant banking and payment products. According to reports, the Financial Services Commission (South Korea’s domestic regulator) will award the licenses in 2016 after carefully reviewing the bids.
The move to team up with eBay and Tencent is particularly surprising given that Kakao has already moved more into payment products with a mobile wallet service supported by 16 of the leading banks that allows customers to make online, offline and person-to-person payments. However with a limited stake for eBay and Tencent the move may be more about adding financial resources than potentially seeing eBay move back into payments after the PayPal spinoff.
Overview by Tristan Hugo-Webb, Associate Director, Global Payments Advisory Service at Mercator Advisory Group
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