The Credit Finance Association of South Korea said at a seminar on June 13 that the mobile payment and settlement market is growing fast with fintech firms emerging in the industry and existing financial companies can no longer lead payment and settlement services.
In South Korea, online and offline simple payment services were used more than 2.37 billion times in 2018 alone whereas the number stood at 858 million in 2016. The total value of the payments soared from 26.88 trillion won to over 80.14 trillion won from 2016 to 2018.
Such a rapid growth of the simple payment market is causing a sense of crisis in local credit card companies. “Financial companies used to lead the payment industry in the past with IT companies having an auxiliary role, but now it is the latter that are leading the ecosystem by providing simple payment platforms,” the association explained.
As of 2018, 43 companies provided 50 different simple payment services in South Korea, including 28 services provided by 26 payment gateways. At the same time, 28 banks and eight credit card companies provided 11 and nine services, respectively.
In addition, the frequency of use of credit and debit cards is forecast to be reduced with payment initiation service providers (PISPs) emerging. “More and more card affiliates are likely to prefer PISPs based on opening banking in order to save card fees,” the association went on to say, continuing, “The credit card market will be directly affected once PISP-based deferred micropayment becomes available in the future.”