Kakao Pay Securities will launch domestic fractional stock trading in August after obtaining its investment trading license in July, according to financial industry sources on the 28th. The move positions the company opposite competitor Toss Securities, which has declined to enter the domestic fractional stock market citing low profitability relative to infrastructure costs. Kakao Pay Securities plans to integrate the service with Kakao Bank's app, which has over 2000万 users, as part of a strategy prioritizing customer acquisition over immediate fee revenue.
Domestic fractional stock trading allows investors to purchase portions of shares — such as 0.1 or 0.01 shares — rather than full shares only. The service lowers entry barriers for small investors, enabling purchases of high-priced blue-chip stocks with as little as 1000 won. Most domestic securities firms with investment trading licenses have adopted the service regardless of company size.
Toss Securities Declines Domestic Fractional Stock Market Entry
Toss Securities provides fractional trading for overseas stocks only and has not entered the domestic fractional stock market. The company maintains a cautious position, citing that profitability from trading fees does not justify system construction costs and complex settlement procedures with Korea Securities Depository.
Both Kakao Pay Securities and Toss Securities are platform-based securities firms that have grown by targeting the 2030 generation and novice investors through mobile-optimized user interfaces, differentiating themselves from traditional securities firms.
Kakao Pay Securities Pursues Customer Lock-In Strategy Over Immediate Profitability
Kakao Pay Securities' entry into domestic fractional stock trading reflects a focus on lock-in effects for future potential customers rather than immediate fee revenue. The company aims to attract young investors entering the market for the first time by enabling small-amount purchases of large-cap stocks that were previously difficult to access due to high per-share prices.
The integration with Kakao Bank, which has over 2000万 users, is expected to accelerate Kakao Pay Securities' independent strategy. The company plans to provide an environment where users can trade domestic fractional stocks within the Kakao Bank app without installing a separate securities app, aiming to establish market presence despite being a latecomer.
CEO Shin Ho-cheol Targets 2000万 Investors Within Three Years
CEO Shin Ho-cheol stated at a recent press conference on the 23rd at Conrad Hotel in Yeouido, Seoul, "Currently, our mobile trading system launch is relatively delayed, so we are in the stage of catching up with the market." He added, "Within three years, I want to create an era where 2000万 people invest," strongly expressing his retail expansion ambitions. The plan focuses on attracting and nurturing users who start investing with small amounts rather than pursuing immediate profits.
Industry Voices Concerns Over Fixed Cost Burden and Uncertain Returns
Some industry observers express concerns. The domestic stock market already has a highly developed exchange-traded fund (ETF) market enabling small-amount diversified investment, and most securities firms introduced fractional trading years ago, making differentiation difficult for latecomers.
Unlike overseas stocks, domestic fractional stock trading cannot generate currency exchange profits, leading to views that actual benefits may not be significant compared to new user inflow effects.
Kakao Pay Securities achieved its first annual profit since establishment last year, but concerns remain about the burden of accumulated deficits of several tens of billions of won from past loss periods. Critics point out that large-scale marketing and infrastructure investments for Kakao Bank integration and system construction could strain the financial structure again in situations where customer inflow effects are uncertain.
One financial investment industry official stated, "Domestic fractional stock trading is a representative attraction service that leaves almost no margin for securities firms. Kakao Pay Securities, as a latecomer, has chosen to break through limitations by partnering with Kakao Bank for a frontal breakthrough, but whether it can generate inflow effects that exceed fixed cost burdens is key."
FAQ
What did Kakao Pay Securities announce on the 28th?
According to financial industry sources on the 28th, Kakao Pay Securities announced it will launch domestic fractional stock trading in August after obtaining its investment trading license in July and will begin app integration with Kakao Bank.
Why did Toss Securities decline to enter the domestic fractional stock market?
Toss Securities maintains a cautious position on the domestic fractional stock market, citing that profitability from trading fees does not justify system construction costs and complex settlement procedures with Korea Securities Depository.
What is CEO Shin Ho-cheol's expansion goal for Kakao Pay Securities?
CEO Shin Ho-cheol stated at a press conference on the 23rd that he wants to create an era where 2000万 people invest within three years, expressing strong retail expansion ambitions focused on attracting users who start investing with small amounts.
