Doubled in Two Years
Korea’s five simple mobile payment service providers such as Samsung Pay, Naver Pay, and Kakao Pay, have increased the combined volume of their annual payments to 15 trillion won (US$13.5 billion).
According to the Financial Supervisory Service (FSS) on November 2, the amount of payments via the five major companies reached 10.127 trillion won (US$9.1 billion) by August this year. If this trend holds, the amount is expected to exceed 15 trillion won (US$13.5 billion) at the end of this year. Samsung Pay came in first by accounting for 57.6% of the market with 5.836 trillion won (US$5.2 billion), followed by Naver Pay (2.150 trillion won or US$1.9 billion), NHN Payco (1.346 trillion won or US$1.2 billion), Kakao Pay (685 billion won or US$616 million) and Paynow (110 billion won or US$99 million).
The simple payment industry is also on the uptick in terms of growth. According to the Bank of Korea, the average daily amount of mobile credit card payments in the first half of this year more than doubled to 57.9 billion won (US$52 million) in two years from the first half of 2015 (27.3 billion won or US$24 million).
The frontrunner is Samsung Pay. The volume of payments via Samsung Pay which was 339 billion won (US$305 million) in 2015 is expected to exceed eight trillion won (US$7.2 billion) this year. This means that the figure increased more than 20-fold in two years. Samsung Pay was powered by Samsung’s highest share in the Korean smartphone market and convenience based on the Galaxy Series.
By registering up to 10 credit cards on your smartphone, you can make payments on and off line simply by way of fingerprint authentication. Card registration is done by scanning a credit card with a mobile phone camera. In August of last year, Samsung Pay’s cumulative domestic usage amounted to 10 trillion won (US$9 billion) and the number of registered users exceeded 9.48 million. The Samsung Pay service is available in 18 countries including the United States, China, Thailand, Switzerland, and Russia. AI assistant Bixby in high-end Samsung smartphones enables you to check the balance of your bank account, send money, and apply for a currency exchange. Samsung is actively expanding its online territory by linking 200 million accounts of PayPal, the number one online payment platform in the US, to Samsung Pay in July.
On the other hand, Kakao Pay that surpassed 20 million subscribers on October 26 will start its offline payment service early next year. You can make payments by scanning a bar or QR code in a store with your smartphone or using a bar or QR code on a smartphone at a store. China uses the Alipay System. Beginning in the second half of next year, Alipay will be available in Korea and Kakao Pay in China. Kakao Pay is aiming to achieve 100 trillion won in annual transactions within five years. Kakao is also preparing a remittance service to help people go Dutch.
NHN Payco, which started online payment service, already secured offline merchants mainly franchised merchants such as CU, Paul Bassett, and Ediya Coffee. Its goal is to secure 3,000 merchants by the end of the year. One of its strengths is the simple payment of academy fees. On the other hand, Naver Pay, a leader in the online business sector, is regarding the offline business as a long-term task. Recently, Naver Pay launched credit cards and check cards, both of which accumulate Naver Pay membership points but the two cards are not loaded with a function to make payment via Naver Pay. However, the industry expects Naver Pay to expand its market rapidly based on Naver’s 42 million members, if the Korean search giant decides to go offline. Currently, the amount of payments via Naver Pay is half of that via Samsung Pay, but Naver Pay subscribers ran to 24 million as of August, ranking Naver Pay first among online payment services. Naver Pay also has 150,000 merchants so a user can enjoy shopping at all online merchants with one Naver ID.
LG is planning to launch an LG Pay online payment service within this year.
Besides, mobile carriers and global information technology (IT) payers are also tapping into the simple payment market. KT launched 'Clip Card' in June. Clip Card is a credit card-shaped device that can hold up to 21 credit, membership and transportation cards and can be used for four weeks at a single charge. Users can enjoy the convenience of simple payment without changing their habits of using a credit card, KT explained. Android Pay, Google's online payment platform, is also planning to land in Korea soon.