Alternative payment methods
Unlocking the South Korea digital wallets market
November 8, 2024•6 min
South Korea is currently the fourth-largest market for video games in the world. In our previous analysis of the region's expanding gaming market, we discussed the rise of South Korea's gaming industry and its trajectory for even further growth.
If you're ready to find success for your game with South Korean gamers, you're in the right place. This guide will provide an overview of South Korea's unique gaming audience and its top gaming payment methods.
In Korea, digital wallets make up a majority of gaming payment methods. We'll provide a complete breakdown of each major wallet, including numbers and projections for future performance. For a partner that can pair your game with these payments and grant unparalleled access to the Korean gaming market, Xsolla is the optimal choice.
Projections indicate that by 2025, over 98% of the Korean population will be digital wallet owners. The number of digital wallet users is forecasted to skyrocket to 52 million by then, and analysts also predict the volume of transactions will increase to 5.5 billion.
Deep dive: Exploring Korea's top digital wallets
The top digital wallets in Korea include Toss, Naver Pay, PAYCO, and Kakao Pay. Supporting these payment methods is crucial for making your content accessible and unlocking a massive gaming audience in Korea. Luckily, Xsolla can easily link these and 700 more payment methods to your game, increasing your reach and opening new revenue streams by tapping into new regions.
Toss
Despite launching in 2015 as primarily a peer-to-peer (P2P) money transfer service, Toss Pay now offers over 40 functions as an all-in-one financial services app. The Toss app allows users to access banking services, track spending, and invest in stocks.
With over 19.1 million monthly active users, Toss is among the most significant Korean market players. At Xsolla, we’ve noted that our partners who used Toss saw their transactions grow by 87.3% from 2022 to 2023 and a sales uplift of 127% across the same period.
Naver Pay
Naver Financial was founded in 2019 and is the fintech arm of Naver Corporation. While Naver Corporation may be best known for its search engine and internet business, Naver Pay is quickly growing in popularity as the flagship digital wallet of Naver Financial. The wallet allows for online and offline payments and integration into Naver's ecosystem for additional Naver services.
Naver's extensive user base allowed Naver Financial to quickly become a significant player in the Korean fintech landscape, with around 31 million registered users as of April 2022. Last year, Naver Financial expanded to launch in more than 60 additional regions and countries through a partnership with UnionPay.
Using Naver Pay, Xsolla's partners increased their transactions by 106.1% between 2022 and 2023. Additionally, their sales increased by 147% in the same period.
PAYCO
NHN's PAYCO emerged on the scene in August 2015. Since then, it has captured 10% of the market share, establishing itself as a crucial player in South Korea's mobile payment market. Accepted by over 90% of merchants and used by 13 million shoppers, PAYCO is extremely popular with university students. The "PAYCO Campus Zone" feature enables convenient, seamless transactions at campus food courts, cafes, and stores and is also used to manage educational vouchers and benefits.
At Xsolla, we’ve watched our partners who integrated PAYCO experience a sales uplift of 4% from 2022 to 2023.
Kakao Pay
Kakao Pay is a mobile payment platform embedded within Kakao Talk, South Korea's leading messaging app. Users can make payment transactions without leaving the app and enjoy a familiar interface that simplifies various financial services.
An exciting feature of Kakao Pay is its integrated rewards and loyalty program. Users can earn rewards by purchasing at participating stores, benefiting the merchants while enhancing user engagement and loyalty.
Using Kakao Pay, our partners saw transactions grow by 5% between 2022 and 2023 and increase their sales by more than 34.2% across the same period.
Additional wallets
Understanding your audience: The Korean gamer profile
Of South Korea's 35 million gamers, 79% are between 20 and 50 years old. The average gamer in Korea spends 1 to 5 hours playing games per week, and a majority of Korea's audience prefers to play on mobile. 84.6% of Korean players play mobile games, indicating the higher accessibility of gaming on smartphones and the high prevalence of smartphones in Korean culture. Still, PC gaming isn't far behind, with 61% of players choosing PC as a platform. Console gamers are the smallest segment of the audience, comprising 24.1% of Korean gamers.An overview of digital wallets in South Korea
Digital wallets account for more than 70% of gaming payments in South Korea and are gaining increasing traction.
Projections indicate that by 2025, over 98% of the Korean population will be digital wallet owners. The number of digital wallet users is forecasted to skyrocket to 52 million by then, and analysts also predict the volume of transactions will increase to 5.5 billion.
Deep dive: Exploring Korea's top digital wallets
The top digital wallets in Korea include Toss, Naver Pay, PAYCO, and Kakao Pay. Supporting these payment methods is crucial for making your content accessible and unlocking a massive gaming audience in Korea. Luckily, Xsolla can easily link these and 700 more payment methods to your game, increasing your reach and opening new revenue streams by tapping into new regions.
Toss
Despite launching in 2015 as primarily a peer-to-peer (P2P) money transfer service, Toss Pay now offers over 40 functions as an all-in-one financial services app. The Toss app allows users to access banking services, track spending, and invest in stocks.
With over 19.1 million monthly active users, Toss is among the most significant Korean market players. At Xsolla, we’ve noted that our partners who used Toss saw their transactions grow by 87.3% from 2022 to 2023 and a sales uplift of 127% across the same period.
Naver Pay
Naver Financial was founded in 2019 and is the fintech arm of Naver Corporation. While Naver Corporation may be best known for its search engine and internet business, Naver Pay is quickly growing in popularity as the flagship digital wallet of Naver Financial. The wallet allows for online and offline payments and integration into Naver's ecosystem for additional Naver services.
Naver's extensive user base allowed Naver Financial to quickly become a significant player in the Korean fintech landscape, with around 31 million registered users as of April 2022. Last year, Naver Financial expanded to launch in more than 60 additional regions and countries through a partnership with UnionPay.
Using Naver Pay, Xsolla's partners increased their transactions by 106.1% between 2022 and 2023. Additionally, their sales increased by 147% in the same period.
PAYCO
NHN's PAYCO emerged on the scene in August 2015. Since then, it has captured 10% of the market share, establishing itself as a crucial player in South Korea's mobile payment market. Accepted by over 90% of merchants and used by 13 million shoppers, PAYCO is extremely popular with university students. The "PAYCO Campus Zone" feature enables convenient, seamless transactions at campus food courts, cafes, and stores and is also used to manage educational vouchers and benefits.
At Xsolla, we’ve watched our partners who integrated PAYCO experience a sales uplift of 4% from 2022 to 2023.
Kakao Pay
Kakao Pay is a mobile payment platform embedded within Kakao Talk, South Korea's leading messaging app. Users can make payment transactions without leaving the app and enjoy a familiar interface that simplifies various financial services.
An exciting feature of Kakao Pay is its integrated rewards and loyalty program. Users can earn rewards by purchasing at participating stores, benefiting the merchants while enhancing user engagement and loyalty.
Using Kakao Pay, our partners saw transactions grow by 5% between 2022 and 2023 and increase their sales by more than 34.2% across the same period.
Additional wallets
- Samsung Pay—According to Statista, Samsung Pay is one of the top four digital wallets used in South Korea. It allows users to deposit and withdraw funds, conduct transactions, store and manage digital items, and more. Samsung Pay controls roughly 13% of the mobile payment market.
- SSG Pay—SSG Pay is one of the top online payment methods for Korean consumers. The service offers a combined payment option that enables users to pay with convenient virtual SSG MONEY or ordinary bank cards.
- 11pay—As of January 1, 2024, the branding of 'SK pay' was changed to 11pay. 11pay is SK Group's simple, highly flexible payment service. Users can conveniently utilize it at stores by paying with touch payment (NFC), cards, accounts, 11pay money, and their SK Telecom mobile phone balance.
The Benefits of Digital Wallets
Why do digital wallets dominate the Korean gaming market? The answer lies in the growing benefits of digital wallets, which include:- Convenience. Digital wallets prioritize accessibility and ease of use for their customers. With user-friendly interfaces that appeal to users of all ages, digital wallets are often a faster and easier way to pay.
- Security. Digital wallets have enhanced security features to prevent data breaches and fraud, safeguard user privacy, and ensure digital inclusivity for all users.
- Loyalty points and rewards. Digital wallets often incentivize use by offering localized rewards and discounts. Users can earn points for every transaction they make, which they can redeem for discounts, free items, or cash equivalents. Merchants may even partner with digital wallets to offer exclusive deals to users of that wallet.
- Cost-efficiency. Digital wallets usually have lower transaction fees than traditional credit card processing fees. Businesses that value the efficiency of digital payments may even offer customers additional savings through lower prices or discounts when using a digital wallet.
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