South Korean FinTech startup Viva Republica, creator of the financial services platform Toss, was granted preliminary approval for a digital banking license from the Financial Services Commission of Korea, a Monday (Dec. 16) press release indicated.
“Toss has already become the leading financial super app in Korea. With a digital bank license, we will be able to broaden our product offering … so that we can accelerate our mission to innovate the financial industry,” said SG Lee, CEO of Viva Republica.
Since its launch in 2015, Toss has become the only FinTech unicorn in Korea. The bank is expected to start operating during the first six months of 2021 after it gets the final nod for a license.
A digital banking license will enable Toss to offer an extensive menu of financial services to individuals and businesses. Calling itself a “challenger bank for the underbanked,” Toss will even offer banking products to people with thin files and mid-range credit scores.
Viva Republic, which was founded in 2013, first launched Toss as a peer-to-peer (P2P) money transfer service, Deal Street Asia reported. Toss Bank will become South Korea’s third digital bank operating without a physical location. In 2017, two internet-only banks – K Bank and Kakao Bank – officially launched.
Valued at $2.2 billion following August’s $64 million funding round, the Toss app has been downloaded more than 30 million times and has over 16 million registered users – over 20 percent of South Korea’s population.
Last year, Kakao Bank and K Bank reported net losses of 21.2 billion won ($18 million) and 79.7 billion won ($68 million) respectively, according to data from the Korea Federation of Banks, Deal Street Asia reported.
On Oct. 31, South Korea started a pilot-testing program for open banking. The South Korean government said it would run the pilot phase and then assess the system and its performance, making adjustments as necessary. The system will be released to FinTech firms by Wednesday (Dec. 18).