New Mobile Payment Concept
With T Smart Pay, SK Telecom is tapping into the mobile payment market. The service, which will be launched at the end of this year, is a totally different payment system that people can use by simply tapping their smartphone on a payment terminal when purchasing products. The charge goes onto customers' phone bills at the end of the month.
Mobile carriers, smartphone producers, financial firms, distributors, portal sites, and Internet companies have developed their own differentiated payment services, and are struggling for leadership in the mobile payment market.
According to industry sources on Sept. 20, SK Telecom has decided to officially launch T Smart Pay at the end of this year, and is currently offering a Beta trial service. The company has joined hands with the Korea Smart Card Corporation that provides a T-money card service at over 100,000 offline stores.
SK Telecom subscribers will be able to pay with near field communication (NFC) technology at public transportation systems in the nation’s five metropolitan cities. Over 100,000 member stores will also accept this form of payments, like convenience stores, bakeries, and pizza restaurants.
Once SK Telecom officially launches T Smart Pay at the end of the year, there will be a considerable ripple effect on the offline mobile simple payment market. The service is expected to be used as a platform for various online-to-offline (O2O) services that enable close affiliated stores and marketing partnerships to send mobile discount coupons to its 28 million subscribers.
Excluding Samsung Pay, most simple payment services are currently focusing on the online payment system. LG U+ has secured more than 3 million subscribers, which is the highest number among mobile carriers, with its three-second simple payment service “Pay Now.” The company will also improve its service via an offline payment system in the future. KT released a mobile wallet service called Clip last month, which brings together all different types of membership benefits and coupon discounts into a smartphone. The company is planning to add online and offline payment functions to the service.
The simple payment market is filled with various services. Numerous payment services, such as Samsung Pay from a smartphone manufacturer, Shinsegae Pay and TMON Pay from distributors, and Kakao Pay and Payco from portal sites, as well as mobile cards from most card companies are all competing with each other to take the leadership of the market. At the end of the year, Google Android Pay and Apple Pay will be launched as well.
Korea Capital Market Institute researcher Lee Seong-bok said, “Considering Korea’s consumption scale, there is not enough room for payment service providers to grow. Merchant fees according to bargaining power and differentiated benefits will eventually decide success or failure of businesses.”