South Korea's fintech sector has moved beyond scale growth and entered a battle over profitability. Toss, Naver Financial and Kakao Pay achieved their first combined annual profit last year, and e-payments company Hecto Financial also posted its best-ever results.

As of April 13, the combined net profit of Toss operator Viva Republica, Naver Financial and Kakao Pay was 390.9 billion won last year, up 141 percent from a year earlier, the financial sector said. Operating profit jumped 274 percent to 511.6 billion won. Combined revenue rose 26.3 percent to 5.52 trillion won, and all three companies set record highs. The gains are seen as significant because profit size and profitability indicators improved alongside scale growth.

By company, Toss showed the most notable improvement. Revenue was 2.70 trillion won and operating profit was 336.0 billion won, each rising sharply from a year earlier, while net profit surged 846 percent to 201.8 billion won. It was the biggest net profit since the company was founded, reflecting balanced results across its business portfolio, including banking, securities, payments and advertising, supported by 29 million subscribers, or about 58 percent of South Korea's population.

Naver Financial, which runs Naver Pay, posted operating profit of 125.2 billion won, up 30 percent from a year earlier. The assessment is that the quality of its profit structure improved as payment volume grew faster than the expansion in user numbers.

Kakao Pay recorded revenue of 958.4 billion won, up 25 percent from a year earlier, and operating profit of 50.4 billion won, achieving its first annual profit since it was founded. Kakao Pay, which has about 38 million subscribers, said offline payment volume jumped 43 percent from a year earlier, serving as a key driver of the shift into profit.

Different diversification strategies... platform virtuous cycle kicks in

The improved results at the three companies are seen as reflecting that platform-based revenue models are beginning to translate into actual profit, beyond the benefits of user growth.

Their specific strategies differ. Toss is adding expansion of offline payments infrastructure to a revenue model that combines advertising and finance. Its offline payments terminal, Toss Place, has deployed about 300,000 units cumulatively and is being used as a base to directly secure merchant payment data. Through Toss Ads, it is also expanding beyond finance-focused advertising into commerce and brand advertising.

Naver Financial is sustaining growth by expanding payments beyond its own ecosystem. The share of payment-related revenue generated outside Naver, including travel, dining and offline stores, has exceeded 56 percent, meaning its reliance on the internal ecosystem has already fallen to below half. A structure in which shopping, advertising and payments are closely linked is supporting a stable earnings base.

Kakao Pay is focusing on converting trust built in payments into financial intermediation fees, including insurance comparison and recommendations and investment services. Securities trading value rose 159 percent from a year earlier to 45.0 trillion won, while personalised advertising based on MyData also grew 87 percent, contributing to revenue diversification. The company plans to raise the share of revenue from financial services even faster after its first shift into profit.

Hecto Financial posts record results, steps up global business

Hecto Financial also achieved its best-ever results last year, with revenue of 187.4 billion won and operating profit of 15.6 billion won, up 17.7 percent and 17.2 percent, respectively, from a year earlier. As easy cash payments and payment gateway services posted double-digit growth, expanded use of its high-margin proprietary membership service, "Nae Tongjang Gyeoljae", drove the results.

Hecto Financial's strategy this year is to diversify growth engines by stepping up global business. It is building stablecoin-based cross-border settlement infrastructure and recently entered the prepaid payments market for foreign tourists visiting South Korea by partnering with an affiliate of Japan's top eSIM operator. Through an exclusive contract with the prepaid payment service Moripay, it plans to expand services to major Asian tourism countries such as Taiwan, Vietnam and Thailand, starting with Japanese tourists. With annual total consumption spending by foreign tourists visiting South Korea reaching about 30 trillion won, travel payments are drawing attention as a new growth engine for Hecto Financial.

Results are also becoming visible in its cross-border settlement business. As of the first quarter of 2026, cross-border settlement transaction value exceeded 350.0 billion won per quarter, and it is characterised by a high-margin structure with a gross margin above 70 percent. With demand for fiat-currency settlements for mega platforms such as AliExpress, Temu and TikTok rising rapidly, the company expects contribution to this year's results to increase further.

In the financial sector, an assessment is emerging that the fintech industry has moved past a phase centred on scale growth and entered a stage of building profit-generation structures in earnest. As platform models based on user bases begin to translate into actual profit, future regulatory responses and business diversification strategies are expected to act as key variables that will determine success or failure by company.

An industry official said fintech companies have entered a stage of specifying monetisation structures beyond simply securing traffic, adding that differentiated revenue models and regulatory response capabilities will influence long-term growth.