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The Korea Herald
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THE INVESTOR
March 29, 2024

LG

LG may ditch mobile payment service for G6

  • PUBLISHED :November 02, 2016 - 17:58
  • UPDATED :November 02, 2016 - 17:58
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[THE INVESTOR] LG Electronics has shelved plans to feature its new mobile payment system LG Pay on its next flagship smartphone G6 next year, industry sources said on Nov. 2.

The Korean tech giant had prepared to launch a card-type mobile payment system, called White Card, over the past year but the launch has been delayed possibly due to technical difficulties. 


A concept image of LG Pay. LG Electronics has ditched the plan due to technical difficulties.



Compared to its app-based rivals such as Samsung Pay, the White Card was supposed to support diverse functions such as an integrated circuit chip and one-time password for better security. But industry watchers were skeptical about the practicality of the tangible card concept.

“We need to consider customer value first rather than launching the service itself. We are updating the service,” LG’s mobile chief Cho Juno said of the delayed launch of LG Pay at the unveiling event of the latest LG V20 smartphone in September.

LG is said to be considering diverse ways to develop its own mobile payment service but the situation seems tricky.

Samsung Pay, the dominant player, uses its own patented magnetic secure transmission, or MST, that supports existing credit card readers at stores. LG needs to pay the royalty or develop its own technology that would take years to develop.

Using near field communication, or NFC, may be a technologically easier option but the service requires retailers to install an extra machine to read. Apple and Google are offering their own NFC-based services in the US, their home turf, but they are not offering the service in Korea due to the lack of related machines.

“Handset makers are betting big on mobile payment service because it is crucial to build customer loyalty for future phone purchase,” said an industry source who wished to be unnamed. “LG is facing tough times to survive in the highly competitive market.”

In the July-September period, LG’s mobile business division suffered extended losses of 466.4 billion won (US$410 million) after a series of failures of its flagship G series phones in recent years.

By Lee Ji-yoon (jylee@heraldcorp.com)

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