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NAVER FINANCIAL | Service & Business | Chung Il-wha

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NAVER Pay’s "Quick Settlement," which boasts the fastest settlement cycle in the world, has reduced the e-commerce industry's settlement period from up to 60 days to just 3 days, garnering strong support from small business owners.

When asked how such a groundbreaking change was made, Chung Il-wha, a platform service designer with 14 years of experience in the Quick Settlement project, explained that it started with finding the answer to a problem that needed to be solved. The most essential thing small business owners needed was "Quick settlement." The decision of NAVER Pay to prioritize users over immediate profit has ultimately returned to the choice of the users. This decision has influenced the entire industry, setting new standards for settlement. Sometimes, innovation is born from a straightforward approach.

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I hear you’ve been working in platform service design for a long time.

Hello, I’m Chung Il-wha from NAVER Financial’s Settlement Planning Team. I’ve been working on settlement platform service design since 2012 and joined NAVER in 2020. Currently, I’m working on planning settlement services for businesses within NAVER’s e-commerce ecosystem, including Smart Store.

My career started off in marketing service design. Then, by chance, I got into the world of platform service planning, and I found the process of solving problems structurally to be very appealing. When designing a platform, it seems like the answer is somewhat predefined, but I found the process of building a structure toward that answer to be fascinating. Especially in settlement service design, for example, the correct answer for an issue at hand may be number 1, but the key is how efficiently and simply you can reach that number 1. The process of creating that is incredibly enjoyable. Also, because it’s a structural task, as I gained more experience, I was able to feel how my sense of progress was steadily coming together, thinking, “For the next plan, if I want to build a more scalable structure, I should implement it in this manner.” That’s something I found to be truly attractive.

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What led you to join NAVER?

Previously, I worked at a mobility company on the billing platform team, where we were responsible for planning everything related to the flow of money, from payments to settlements. Our team handled everything from payment processing, coupons, and points, to actual settlement with drivers, as well as creating a settlement process between affiliated companies for linked partners, and even aggregating financial data to provide it to partner companies.

However, I wanted to focus more on the settlement domain specifically. While I enjoyed and appreciated gaining diverse experiences, I felt the desire to concentrate more on a single area. At that time, I found out that NAVER FINANCIAL was looking for a settlement service designer. Since I have been working on settlement platforms for a long time, I have been interested in NAVER Pay since it was launched. Plus, fintech was a hot topic at that time, so I thought it would be a great opportunity to create a settlement service at NAVER FINANCIAL. That’s how I ended up joining NAVER.

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What do you think are the most important fundamentals in settlement service design?

Accuracy, convenience, and speed in settlement. These are the guiding principles of our settlement services, which we always emphasize like a mantra. The most important thing in settlement is that it must be accurate. Secondly, the process of money flowing into the settlement must be convenient for users to track, and thirdly, payments must be made as quickly as possible. While there may be some variations depending on the business direction, these three principles are our unchanging core and foundation. When these principles are upheld, the business ecosystem can remain solid, and a healthy cycle is created, where buyers receive quality products within the guaranteed time frame.

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Tell us about the most memorable project you participated in NAVER.

Settlement is actually a domain that doesn't stand out much because you basically take the process for granted. It’s a given that a seller enters the NAVER ecosystem, sells products, and receives accurate settlements for those sales. So, settlement is something that doesn’t typically come into the spotlight because when it goes smoothly, it’s just something you naturally expect to happen. In fact, if something goes wrong, that’s when it becomes more noticeable.

However, "Quick Settlement" was a completely new experience. It was the project that first made me think about the settlement system from a service perspective. By enabling faster settlements, we were helping the sellers who entered the NAVER ecosystem, and this was the first task where I worked with the mindset that the service I was creating was benefiting the users.

The "Quick Settlement" service, which started in 2020, settles 100% of the payment the day after shipping begins. At that time, the typical settlement period in the domestic and international e-commerce industry was up to 60 days. NAVER already had the fastest settlement system in Korea, settling within one business day when the buyer confirmed the purchase. However, if the buyer delayed or extended the purchase confirmation, the settlement would inevitably be delayed as well.

But more than half of the businesses in NAVER Smart Store are small and medium-sized enterprises. These small business owners rely on sales revenue to produce and order new stock, so cash flow is especially important. If settlements are delayed, they may even need to take out loans to prepare for the next sale. "Quick Settlement" was created to address these realistic issues for small business owners. Now, we have the shortest settlement cycle among major global e-commerce platforms, going beyond just Korea.

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There must have been many factors to consider before implementing Quick Settlement.

First of all, it was a tough business decision. From the company’s perspective, it was a service that involved opportunity costs due to lost interest income, and because it’s a pre-payment structure before purchase confirmation, we also had to consider the potential for abuse. However, the company made the decision to prioritize solving the pain points of businesses over immediate profit, which made this planning possible. We were also confident that this would allow more businesses to enter the NAVER ecosystem.

Additionally, from the beginning of the project, the FDS (Fraud Detection System) team worked with us, simulating numerous abuse cases and creating application and retention criteria that would minimize risks while lowering entry barriers. We were able to establish our unique standards because FDS had been deeply integrated into NAVER Pay from the start, strengthening its technological capabilities. It wasn’t something completed solely by the settlement planning team, but rather a result of NAVER Financial’s technological capabilities, a user-first approach, and the collective mindset of all of us working together to create the service.

Our efforts have also influenced the domestic and international e-commerce market, and we’re seeing a gradual shortening of settlement cycles across the industry. It’s fulfilling to see the positive impact we’ve made, and we’ve also been fortunate to receive media attention. While I’ve been planning settlement platforms for a long time, this experience allowed me to awaken a new perspective and was truly a meaningful one.

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Can you tell us about about a project in addition to Quick Settlement where you worked on another feature that should have already been an essential part of our platform, and addressed it from a service design perspective?

Creating the "Biz Wallet" service for business owners was also a new attempt that our team achieved. Biz Wallet can be seen as a virtual wallet that sellers can use. Sales proceeds are loaded into this wallet, and the balance can be used immediately to purchase NAVER's commerce solution products, such as events, advertising, and monitoring tools, to assist with business operations.

Previously, a certain amount had to be deposited online to facilitate immediate refunds for order cancellations. Therefore, the system operated by accumulating sales proceeds into the wallet, and once a certain amount was reached, it would be settled into a bank account. However, considering our service policy, I thought it would be a good idea to expand this balance feature, which was originally just for settlements, to allow payments using the accumulated amount. Typically, settlement and payment are separate, so it was initially unfamiliar for the team that designs settlement methods to also consider payment solutions. However, I believed that creating a service from the business owner’s perspective was something we, as a team focused on settlement, were best suited to do. By rebranding a feature that was originally designed for settlement, we developed it into the first payment method dedicated to business owners, completing the "Biz Wallet" service. This now helps sellers operate more conveniently within the NAVER ecosystem.

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Do you have a dream project in mind?

As a settlement platform service designer, I've always thought about hosting settlement/payment services at some point. To put it simply, there are many e-commerce platforms out there, and usually, sellers don’t just sell on one platform. They sell across multiple platforms, and I’d like to try creating a service where we collect settlement data from all the platforms they've joined and provide payments all at once.

However, it doesn’t end with payments. Sellers also need to file taxes. When the VAT filing period comes, they have to report sales from the previous quarter, but since the data is scattered across different platforms, a lot of time is spent on consolidating and ensuring the data’s accuracy. Some sellers even bear the cost of hiring an accountant, but in cases where they have to handle it themselves, they often have to put their sales activities on the back burner just to make sure everything is properly aligned. So, I’ve been thinking about creating a program that could help streamline this process. A solution that would allow sellers to handle everything from settlement to tax filing all within the NAVER ecosystem, providing convenience in one go.

Of course, even if we create such a solution, I think it would take time to convince sellers that our data is trustworthy. As someone designing settlement services, it is also my role to make the necessary processes as simple as possible so that sellers can focus solely on their sales. This is a project I dream of accomplishing someday.