NCSOFT invests in KG Inicis for FinTech business

By Yoon Sung-won

NCSOFT, the nation’s leading online game company, said Monday it will launch a “FinTech” business in partnership with Korea’s largest electronic payment company.

NCSOFT said it has invested 45 billion won ($40.79 million) in KG Inicis to establish a strategic partnership. The two companies will organize a joint task force for the FinTech business and co-develop business models for next-generation payment systems. FinTech is combination of finance and technology and refers to technologies that facilitate financial transactions through online and mobile platforms.

“With the investment, we are entering FinTech and the next-generation payment sector,” said NCSOFT Chief Financial Officer Yoon Jae-soo in a statement.

NCSOFT said it acquired 45 billion won’s worth of KG Inicis’ convertible bonds that will mature in four years. The firm can ask for a put option every six month after two years. The bonds can be converted into stocks starting one year after the issuance, the company said.

The move came as local online game companies seek new growth engines amid sluggish growth of the online game sector.

“We have prepared for a long time,” said an NCSOFT spokesman. “Once converted, the acquired bonds are estimated to be about 7 percent of KG Inicis shares. The amount of investment is significant and shows our willingness to enter the FinTech business.”

KG Inicis is the dominant player in the domestic payment market with more than 100,000 affiliated stores. The amount of money paid through its service exceeds 10 trillion won a year, the company said.

The two companies seek to connect KG Inicis’ know-how in payment service to NCSOFT’s technological infrastructure in Internet services, software development and security.

Under the partnership, the two companies aim at securing 20 percent of the global online-to-offline (O2O) market valued at 700 trillion won. O2O refers to technologies designed as a marketing tool for offline shops to attract more customers to stores.

KG Inicis said the joint business with the two has a technological edge and expertise in user certification and approval compared with local market competitors including Daum Kakao and NHN Entertainment.

The company plans to launch a convenient mobile payment service based using near-field communication technology. The Financial Supervisory Service has already approved the service, the company said.

The two said they plan to expand their synergy to the global business.

KG Inicis established partnerships with world’s leading e-commerce companies ― PayPal in the United States and Alipay in China ― in 2013. Its mobile payment affiliate Mobilians is pushing ahead with a separate plan to enter overseas markets in Southeast Asia and Central Asia.

NCSOFT began its overseas business in 2000 and has established global distribution channels in North America, Europe, Japan and Taiwan.