Online Transactions

Soon, having no wallet will not work as an excuse to not buy lunch.
Soon, having no wallet will not work as an excuse to not buy lunch.

 

SNS company KakaoTalk will launch a mobile payment service starting in June that can send up to 100,000 won (US$97.60) a day, touted as a game changer in cash transaction methods.

“Bank Wallet Kakao” is expected to have a massive ripple effect since it can replace payment methods such as cash or credit cards for local banks.

Industry observers are betting that once the local banks grab 20 million users of KakaoTalk’s “cyber money,” a new era will arrive when people will no longer need cash or credit cards when out on the town. Instead, simply a smartphone will be enough.

Much earlier, credit card companies had proclaimed that they would predominate the mobile market by introducing new payment methods such as app cards and universal subscriber identity module (USIM) cards, but they have failed to resolve the issue of infrastructure expansion due to limited size and conflicts of interest.

Local bank associates see that since larger local banks are holding hands tightly with KakaoTalk, the local SNS company is more likely to predominate the market rather than the card industry.

A high-ranking official at a local bank said, “Once security problems are resolved so that payments and transfers over 100,000 won are possible and local banks expand the payment infrastructure via smartphones, we will live in an era where all we need is a smart phone when we leave home.”

Global IT companies have already entered into financial services where payments can be made without a credit card.

One such company is Alipay. Via Alipay, once users deposit a certain amount in an Alipay account, it gets converted into Internet money so that it can be used at online and offline shopping malls. Internet money can be used directly for online transactions, while offline it can be transferred to another smartphone in the form of a bar code so that payments can be made.

Internet money can be also sent to another person. Furthermore, if Internet money is transferred to a “Yuebao” account, one can use an online financial product that generates profits from money market investments. This means the service encompasses payment, transfer, and asset management. 

In the meantime, Alibaba, which supports Korea’s Lotte duty free online shopping mall payments, will advance into the offline payment service market from this month.

Also, the world’s largest SNS company, Facebook, announced that it will start online money transfer services in Europe.

Soon, Facebook users can send and receive cash via Facebook instead of other payment settlement agencies.

Google also has been offering its “Google Wallet” service that allows payment via a smartphone that is linked to a credit or check card, just like the local App cards.

Google is planning to expand their service to include payments and investments, like Alipay.

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