Kakao Pay, mobile payment service under South Korea’s leading messenger app KakaoTalk, has passed the government’s review process for its acquisition of Baro Investment & Securities Co., moving a step closer to becoming the country’s first fintech company offering broad capital investment options.

The Securities & Futures Commission under Financial Services Commission on Wednesday gave a preliminary approval to Kakao Pay to take over Baro Investment & Securities, leaving just one administrative step towards a full acquisition.

Kakao Pay filed for the government review in April last year after it acquired a 60 percent stake in the firm for 40 billion won ($34.3 million) in October 2018. The process has been delayed since Brian Kim, the largest shareholder of Kakao and the board chair, was indicted on a charge of violating the fair trade law.

In Korea, anyone who is fined or more than fined for violation of financial laws is not allowed to become the largest stakeholder of a financial institution for the next five years.

But after Kim was acquitted in the final trial, the financial authorities kicked off the acquisition review process.

The final decision on the buyout will be made at the Financial Services Commission’s meeting due on Feb. 5.

Once it gets a final nod, Kakao Pay becomes the first fintech name in the capital market of Korea that so far has been dominated by financial companies and asset managers. It would be able to offer investment benefits and financial products to customers, on top of existing payment and wire transfer services.

Some experts say Kakao Pay will grow fast to become the investment market No. 1 if it adds a stock trade option to the messenger platform KakaoTalk as planned.

By Jin Young-tae and Lee Ha-yeon

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]