Inconvenience was what first got Lee Seung-gun, the head of FinTech startup Viva Republica, and his four colleagues to think about creating a mobile transaction app that will somehow mitigate "everybody's pain in their neck."
It takes a great deal of patience when it comes to online banking in South Korea. At least a few downloads of security programs is only a start, with typing in the recipient's account details and verifying the sender's ID via a password-based authentication certificate to usually follow.
And you have to do this all over again every time you transfer money, or if the system fails.
"If we can offer a solution to online payment issues, we thought it would be something very meaningful to do," Lee said in an interview with Yonhap News Agency on Tuesday.
Toss, the mobile money transfer app created by Viva Republica and three major banks here, was born out of such a motive and is now ready for a December launch. It has freed users from having to go through the complex and repeated security and verification process, Lee said.
Toss asks users instead to simply tap from their contact list who they want to send the money to. Then select a bank from the scroll bar and type in the account number before pressing the send button. The remittee gets a text message from Toss containing a URL link, which directs him/her to have the money be deposited to his/her account.
"Toss debuts as a mobile remittance app, but we plan to grow it into a (mobile) payment platform, like Kakao's BankWalletKakao," the 32-year-old entrepreneur said.
The mobile payment platform has emerged as a fresh source of investment for South Korean firms as they are in a neck-and-neck race searching for a new growth driver in the saturated market.
Notably, the convergence of finance and information technology, also known as FinTech, has been expanding fast among upstarts and existing bigger firms in the IT, telecom and banking sectors.
The latest platform launched Nov. 11 by DaumKakao Corp., the provider of Korea's most popular messaging app KakaoTalk, and 12 local banks, is a huge challenge for large firm-affiliated rivals since its 37 million active users secure steady demand for the company.
"We've differentiated Toss from BankWalletKakao by making transfers possible even when the recipient doesn't have Toss on his/her cellphone, because Toss is like direct debit, the money goes straight to your account, whereas you need both sides to have KakaoTalk installed for BankWalletKakao," Lee said.
Toss is protected by U.S. anti-hacking software by Arxan Technologies, which will cost Viva Republica 200 million won (US$183,000) per year.
Nonetheless, Toss will be available free of charge, Lee said, as his company will take in the reverse margin as marketing costs.
"We may seek more funding if necessary, just like we were lucky enough to get one from a Silicon Valley firm at the start."
Viva Republica received $1 million from a U.S. investor, who Lee asked not to be named, at the early stage of its test-launch of Toss' beta version.
Now as a team of nine, Viva Republica will strive for a bigger picture of becoming the first Internet bank in Korea that offers mobile financial services stretching payment and settlement, foreign exchange, loans and credit.
Korea is at a nascent stage of talks about laying legal grounds for the establishment of Internet banks. The rise of FinTech has gotten the financial authorities to start looking into it recently.
"The local cyber law centers too much on ex-ante regulations that sets at its own discretion a mandatory standard for the whole industry to comply with regardless of the firm's size. It needs to be eased in the way that will allow free competition and variety," he noted.
Lee said his company is willing to take part in the industrial sea change, as much as he went through a big shift in life himself, from a dental major at Seoul National University who also holds a U.S. dental license, to a "netpreneur."
"I think it's my personality ... I'd rather find and do something that's meaningful to me, than having a stable job," Lee said. "Also starting a company, I think, has this aspect of making the world more prosperous by providing what it needs, which in return will bring prosperity to us." (Yonhap)
