NAVER Pay Drives SME Business Growth, Perceived Utility by SMEs Is KRW 107 Billion Higher Than Commission Fee Paid
NAVER Pay Drives SME Business Growth, Perceived Utility by SMEs Is KRW 107 Billion Higher Than Commission Fee Paid
“NAVER TechFin Report 2022”
NAVER Pay Drives SME Business Growth, Perceived Utility by SMEs Is KRW 107 Billion Higher Than Commission Fee Paid
- “NAVER TechFin Report 2022” analyzes the value that sellers derive from NAVER Pay's order management service and the impact of “Insurance Guide for business owners“ in improving their access to financial information.
- NAVER Pay order management service is a catalyst for business growth, as it leads to an increase in sales and orders; SMEs perceive the service's value to be over KRW 107 billion higher than the commission fee currently charged.
- “Insurance Guide for business owners” has proven to be successful in improving access to financial information for SMEs with limited access and creating demand for financial products
February 16, 2023
NAVER Pay has been shown to have contributed to the growth of small- and medium-sized enterprises by boosting their sales and business performance.
The “NAVER TechFin Report 2022”, published on February 16 by NAVER Financial (CEO Park Sang-jin), analyzed the utility and value NAVER Pay provides to sellers, as well as the effect of “Insurance Guide for business owners“ on enhancing access to financial information for business owners. The report was conducted by Professor Kang Hyoung-goo of Hanyang University, Professor Choi Hyung-suk of Ewha Womans University, and Professor Kim Woo-jin of Seoul National University, with their research teams.
According to the report, SMEs realize that NAVER Pay’s convenient payment process leads to an increase in sales and provides greater economic utility compared to the commission fee charged by NAVER Pay’s order management service.
NAVER Pay strengthens business growth with perceived utility by SMEs being KRW 107 billion higher than the current commission fee
Professor Choi Hyung-suk and his team at Ewha Womans University examined the order management service provided by the simple payment service NAVER Pay to sellers and analyzed the utility and value that the service brings through a survey. The order management service is a comprehensive solution that encompasses all the essential services required for online commerce businesses, such as sales management, payout management, customer management, and benefits provision for Smart Store businesses.
[Most satisfactory NAVER Pay service by sales]
According to the survey, more than half of the sellers rated 'sales management' as the most satisfying aspect of the order management service, followed by ‘payout management.’ Professor Choi’s research team concluded that systemizing and providing support for tasks that small business owners often find challenging, such as managing orders, shipping, tracking, cancellations, returns, exchanges, and completing daily payouts on the next business day, offer significant utility to these businesses.
Sellers also reported an average increase of 59% in orders and 67% in sales after using NAVER Pay. According to the word cloud analysis on seller utility, they perceived NAVER Pay's convenience in minimizing customer burden during payment as a key factor in the increased sales.
[Increase in seller utility with NAVER Pay order management services felt by sellers]
Furthermore, the majority of sellers reported that they find the utility of NAVER Pay to be higher than the commission fee they currently pay for its services. *According to the report, the perceived utility of NAVER Pay was found to be more than KRW 107 billion higher than the commission fee. Those that used both Smart Store and open market services or engaged in both online and offline businesses were observed to be more willing to pay to experience better utility. The research team attributed this to the fact that sellers who have experience with other comparable sales channels may place a higher value on NAVER Pay, resulting in higher perceived utility.
* [Note] The NAVER Pay’s total utility perceived by affiliated SMEs of NAVER Pay was calculated by multiplying the difference between the commission rate the businesses were willing to pay, the actual commission rate with annual sales, and the number of businesses.
The 'Insurance Guide for business owners' is effective in improving access to financial information for SMEs with limited exposure and creating demand for financial products
Professor Kim Woo-jin and his research team at Seoul National University used the “Insurance Guide to CEOs” to analyze the impact of a fintech service for SMEs on financial information accessibility in financial markets where asymmetric information is prevalent.
The team compared Smart Store and Smart Place sellers’ awareness of business insurance requirements before and after accessing the guide. The result showed that as much as 64% of the total required population was not enrolled in mandatory insurance, indicating a lack of accurate information among sellers about whether they were required to have insurance. The study also found that sellers with lower financial literacy were less likely to enroll in insurance despite being required.
The 'Insurance Guide for business owners' had a positive impact on the awareness of business insurance requirements among the respondents. Specifically, 24% of the respondents became more likely to accurately determine the need for insurance after accessing the guide. This finding suggests that providing various financial information online to sellers with low financial literacy can improve their access to financial information and help them make better-informed decisions regarding their insurance needs.
In particular, 48.1% of the respondents showed increased interest in additional insurance programs beyond mandatory insurance after reading the guide. This result suggests that better access to information may not only improve financial literacy but also increase demand for financial products.
Professor Kang Hyoung-goo of Hanyang University, who led the study of “NAVER TechFin Report 2022,” said, “The IT industry’s continuous efforts to improve user experience and accessibility to information and services have now extended to the finance industry through fintech. Through the combination of IT and finance, new horizons are opening up for financial consumers. In particular, we expect the SMEs to benefit from the financial innovation through the digital finance ecosystem being built by NAVER Financial.”
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