Barriers are disappearing in the financial service industry. Internet firm Tencent and e-Commerce company Alibaba are moving into the banking business, and global IT powerhouses such as Google and Apple are flocking into the payment market. Under the circumstances, industry experts point out that the local financial authorities should eliminate regulations, so that Korea doesn't fall behind in the fast-changing global financial market.
Alibaba, the largest e-commerce company in China that recently listed itself on the New York Stock Exchange with great success, has been granted a permit to establish a private bank. Tencent, in the meantime, started to establish WeBank in July of this year in the Chennai Special Economic Zone located in Guangdong Province. The Wall Street Journal has reported that the emergence of the two Chinese companies having a technological strength in will have a great impact on the global IT and financial sectors as a whole.
In Japan, e-commerce firms such as Rakuten and Sony Finance are running Internet banks. American securities firms, credit card companies, and automobile manufacturers are running their own Internet banks, too. BNP Paribas has launched the mobile bank of Hello Bank in Europe as well.
The payment market is showing a fundamental shift as well. Google has launched an e-wallet service titled Google Wallet and e-Bay’s PayPal and Alibaba’s Alipay are also evolving rapidly, based on various payment services. In September, Apple unveiled its mobile payment service, Apple Pay, with the new iPhones. Apple Pay is a credit card-less payment service using the NFC feature of the iPhone 6 and iPhone 6 Plus.
Nevertheless, Korea is failing to catch up with the trends. The financial companies and banks that made an attempt to establish Internet banks in 2000 were thwarted by existing regulations. Although the Financial Services Commission decided in July to discuss the issue as a part of deregulation efforts, the issue is scheduled to be handled over a long term.
Fresh attempts are being made in the payment market as well, but the opposition from some financial institutions and government regulations still remain. At present, Kakao is trying to release the remittance service dubbed Bank Wallet Kakao with the Korea Financial Telecommunications and Clearings Institute, and some local banks and the payment service of Kakao Pay with LG CNS and credit card firms. Naver is also moving to acquire shares of Korea Cyber Payment (KCP) via its subsidiary NHN Entertainment.