] The competition for the mobile payment market is heating up in South Korea as tech firms move to outdo each other with more convenient and safer banking services on smartphones that they hope replace physical banks.
Samsung Electronics’ payment service Samsung Pay launched in August 2015 is currently a dominant player with more than nine million domestic subscribers here. Samsung Pay is a mobile service allowing users to use their premium Galaxy series devices as they would use cash or credit cards, and even withdraw or send money from bank accounts.
Users can make a payment simply by holding their phone closely to credit card readers in any stores.
The mobile payment service is able to be logged in through iris and fingerprint verification without typing in their ID or password. Samsung said it plans to continue to improve the biometric system for upcoming smartphones for safer banking transactions.
Its local rival LG Electronics has been relatively late in launching its service LG Pay, but is moving to expand its services in more stores across the country. Although LG Pay is currently being offered only via its premium phones like the V30, the firm plans to incorporate the feature into mid-range phones starting next year. It said LG Pay will reach the United States next year.
The tech firm also said Sunday it would upgrade LG Pay to support online payment beyond off-line stores. Online payment is gaining traction among smartphone users because they can purchase products simply through biometric verification. Its rival Samsung Pay saw more than 30 percent out of total payment transactions come from online last year.
Apart from the handset makers, the nation’s two largest search engine firms joined the mobile payment race.
Naver has currently 24 million subscribers for its Naver Pay while the number of users of mobile messenger Kakao’s Kakao Pay stands at 20 million.
Kim Jong-dae, a researcher at LG Economic Research Institute, said online firms’ joining the market may threaten handset makers’ payment services as they are not bound by any specific smartphone.
Global firms including Google and Apple are also eying the market. In January, Google Payment Korea, which has partnered with several local card companies, registered as an electronic financial business operator at the Financial Supervisory Service. Apple’s executives also held a meeting with South Korean financial authorities to test the waters before fully reviewing a potential launch here.
“The initiative of mobile banking services will increasingly be shifting from card companies to tech firms as more users lean on their smartphones for banking services. The payment market still at a nascent stage will be led by companies providing more convenient and safer services,” said Chung Yoo-shin, a professor at Sogang University’s business college.
By Shin Ji-hye/The Korea Herald (firstname.lastname@example.org