Simple Payment Market Landscape Changing
With the launch of Apple Pay in Korea imminent, Naver Pay and Samsung Pay which rank first in the online and offline payment markets, respectively, are forging an alliance, signaling a seismic change in the simple payment market in Korea.
Samsung Pay services will become available at online merchants of Naver Pay and Naver Pay services will become available at offline merchants of Samsung Pay. Attention is focusing on whether the two simple payment services can build a win-win business model.
Samsung Electronics and Naver Financial, the operator of Naver Pay services, inked a business agreement on Feb. 20 to promote the mobile payment experience. The two companies will collaborate in the payment and digital wallet sectors.
Specifically, Samsung Pay will be added as one of the options when customers make payments at 550,000 Naver Pay online merchants in Korea. “Samsung Pay’s collaboration with Naver Pay will enable Samsung Pay users to enjoy convenient mobile payment experiences both offline and online,” said Han Ji-ni, vice president of the Digital Wallet Team at Samsung Electronics’ MX Division.
Naver Pay users who have made offline payments with QR codes in the past will be able to use Samsung Pay's payment method, which allows users to pay by bringing their mobile devices near point of sale (POS) systems. This means that Naver Pay users will be able to pay at all offline merchants that accept payment through Samsung Pay services across the country.
This collaboration between Samsung Pay and Naver Pay aims to keep in check Apple Pay, which is expected to be launched in Korea in early March at the earliest. Apple Pay uses a similar payment method to that of Samsung Pay.
In particular, as Naver Pay and Samsung Pay have concentrated on increasing the proportion of offline payments and online payments, respectively, as their main tasks, their alliance is expected to scratch each other's back.
For this reason, fintech industry insiders believe that their collaboration will be a win-win way, not a zero-sum game. “Those with a near-sighted perspective may think that Naver Pay, the No. 1 online simple payment service provider and Samsung Pay, the No. 1 offline simple payment service provider, will give away pieces of their respective market pies,” said an official of the fintech industry. “But they are overwhelming No. 1 player in the online and offline sectors and do not have a much overlapping user base, it will enable the two to elevate their positions in the market.”