(Source = KakaoPay homepage capture)
Kakao Pay is suspending non-life insurance companies’ auto premium comparison service. This is because the financial authorities judged the platform’s insurance comparison service, which was considered an advertisement, as a ‘brokering act’. Kakao Pay turned on a ‘red light’ in its initial public offering (IPO).
According to the insurance industry on the 10th, Kakao Pay will provide a car insurance comparison subscription service in partnership with six insurance companies, including Hyundai Marine & Insurance, DB Insurance, KB Insurance, Hana Insurance, Aksa Insurance, and Carrot Insurance, on the 24th of this month, during the guidance period of the Financial Consumer Protection Act. It was decided to operate until After the service is discontinued, it will only maintain alliances with six insurance companies in the form of banner advertisements.
Kakao Pay has been providing a service that compares car insurance premiums from six insurance companies and links them to the website of the insurance company selected by consumers. When a consumer signed an insurance contract, a certain level of advertising commission was received.
The financial authorities judged that the Kakao Pay service was not just an advertisement but an intermediary. The Financial Services Commission recently informed the industry that in order to maintain its services, it is necessary to register as a financial product broker.
Kakao Pay said, “In accordance with the guidelines of the financial authorities, we have continuously improved our services and will do our best to ensure that there are no illegalities this time as well.”
The securities industry predicted that this action by the financial authorities could adversely affect the IPO of Kakao Pay, which is targeted for next month. As the insurance comparison service is the main source of revenue for Kakao Pay, it also raised the possibility of modifying the securities report. It is known that Kakao Pay will determine the final offering price after forecasting demand for domestic and foreign institutional investors on the 29th and 30th, and then proceed with the general subscription on the 5th and 6th of next month.
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