Shinsegae Group’s Mobile Payment Sale Hits a Wall as Kakao Pay Bows Out

Shinsegae Group’s efforts to divest its mobile payment businesses have hit a roadblock as Kakao Pay backs out of acquisition talks, the retail giant confirmed Thursday.

In a statement, Shinsegae Group said, “We had been exploring a strategic partnership with Kakao Pay in the mobile payment sector. However, due to evolving strategic priorities for both companies, we’ve mutually agreed to conclude these discussions.”

Industry insiders reveal that negotiations between the two companies had been ongoing since early 2023, with the potential sale of SSG Pay and Smile Pay valued at approximately 400 billion KRW (290 million USD). Sources indicate that Kakao Pay had proposed a lower offer during the talks.

As Kakao Pay emerged as the frontrunner, Shinsegae made strategic moves to streamline the sale. Earlier this month, it spun off the mobile payment arm of its e-commerce platform, SSG.com, creating a new entity named Platinum Payment.

For Kakao Pay, the acquisition was seen as a crucial step to narrow the gap with industry leader Naver Pay and bolster its market position. Despite reaching a preliminary agreement on key issues such as pricing and staffing, the deal ultimately fell through when Kakao decided to reevaluate the plan, according to industry sources.

“Moving forward, we’ll focus on enhancing our mobile payment expertise, maintaining robust service operations, and driving independent growth,” Shinsegae stated. The company emphasized its commitment to boosting competitiveness across both its retail and payment sectors.

This setback marks Shinsegae’s second unsuccessful attempt to offload its payment platform, following a failed deal with Toss in 2023. At that time, the conglomerate had sought to sell SSG Pay for roughly 700 billion KRW (525 million USD).