New Standard to Be Used from 1st Half of Next Year
The Credit Finance Association has completed the development of the Korea Local Smart Card (KLSC) as a new IC card standard and notified nine credit card companies of the fact. The association and the companies agreed early last year to develop the standard, and beta tests were conducted at Samsung Card and Lotte Card until recently.
The KLSC is compatible with the EMV standard and payment terminals do not have to be replaced. In addition, it is compatible with Justouch, the domestic NFC standard, and KLSC-based payments can be made nationwide at convenience stores and so on.
South Korean credit card companies have paid huge fees to foreign companies such as Visa and Mastercard. Specifically, in 2020 alone, the former paid 109.426 billion won to six foreign credit card companies for settlement in South Korea.
The KLSC is expected to reduce this dependence. In addition, unnecessary additional costs can be avoided. The current IC chip price is 800 won and the price rises to 1,600 won when payment for public transportation is added to it. The price is likely to exceed 2,000 won in April next year as Visa and Mastercard are planning to make contactless payment compulsory. Infrastructure for contactless payment is not ready yet in South Korea.
The new standard is scheduled to be applied to Samsung Card and Lotte Card in the first half of next year before nationwide application. In addition, the association is planning to export it to non-EMV countries so that KLSC-based settlement can be expanded abroad.