Viva Republica, the operator of South Korea’s popular peer-to-peer (P2P) payment app Toss, is confident of turning out a profit from next year, given its solid earnings from non-money transfer businesses and an anticipated fall in transaction fee, its chief executive said.

“We expect to be in the black next year as all the services, except simple P2P money transfer business, are reaping profits,” Lee Seung-gun, who founded and groomed Viva Republica as an industry leader said in his interview with Maeil Business Newspaper on Tuesday. It would be the first time for the company to post profit since the business took off in 2015.

Despite its huge popularity, Viva Republica has been questioned for its sustainability and profitability. Last year, it registered an operating loss of 44.4 billion won ($37.3 million).

To bolster its revenue base, Viva Republica recently expanded its high-profit financial products brokerage business.

The simple money transfer service has been one of Viva Republica’s key identities and helped the company grow as a rare Korean fintech unicorn, an unlisted startup with a valuation of more than $1 billion. But the service nevertheless has been cash-draining business due to large commission expense paid to banks for money transfer between bank accounts.

Its brokerage services for loan, insurance and investment product sales has been making money through drawing commissions from banks, securities firms or insurers. Viva Republica is actively expanding its brokerage service of referring customers to various financial products such as loans and insurance for commissions from financial companies. It is reported that Toss insurance service currently accounts for 60 percent of the local insurance brokerage market.

It is awaiting the final go-ahead to launch the third online-only bank in a consortium with commercial banks.

The company expects to see its commissions to banks for the simple money transfer service drop sharply to about one-tenth of the current rate with the introduction of the so-called open banking system that has taken effect this month. The open-banking system will enable consumers to manage multiple bank accounts and withdraw, transfer money from a single app.

By Lee Sae-ha and Cho Jeehyun

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