Payment System Expansion

 

Mobile quick payment service KakaoPay is expected to expand its service from online to offline as early as the beginning of next year. This marks the emergence of a new service similar to Apple Pay, an offline payment service on the iPhone 6. Many expect that the competition in the quick payment market originating online would switch to the offline sphere in the coming year.

Sources in information technology circles said on Dec. 15 that DaumKakao and LG CNS are accelerating the development of an offline version of KakaoPay, with its launch aimed at the first quarter of the coming year. The strategy is to continue its big success achieved through their KakaoPay online payment solution, which saw over 1.2 million people join just one month after it launched in September.

KakaoPay is a mobile payment solution co-developed by DaumKakao, the service provider for the KakaoTalk messenger platform, and payment agency LG CNS. It enables instant payments by just typing in a pass code after users register their credit card information. Currently the service is only available for online purchases.

The new version is expected to implement a barcode system as an offline payment method. When users purchase goods in a shopping mall, the KakaoPay application can be run on the spot to generate a barcode for a one-time use, which would be processed through a reading machine to complete the payment. The barcode system is favorable in that no additional investment is required, since most offline affiliates have a reading machine installed. DaumKakao and LG CNS are reported to be working on preliminary tasks to include franchise stores for the upcoming service as well.

However, DaumKakao and LG CNS are considering implementing a near field communication (NFC) system along with the barcode system. Though the reading machines that support NFC are not widely distributed yet, their future growth potential is quite promising, as illustrated by Apple Pay's success.

Meanwhile, once KakaoPay expands to the offline market, it could face a big bout against Samsung Electronics. Samsung Electronics is showing fast paced moves, recently launching a consulting group to enter into the offline payment market, planning to do so by integrating app cards from card companies with its own payment application, Samsung Wallet.

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