Due to Low Utilization Rates
After Samsung Card parted ways from Samsung Pay, Samsung Group’s electronic payment service, Woori Card and Lotte Card have also decided to terminate their Samsung Pay-linked services due to low utilization rates.
Woori Card and Lotte Card will end their Samsung Pay-linked services provided through their applications at the end of this year, following Samsung Card, which terminated the services in July. Hyundai Card is reportedly still in talks with Samsung Electronics over extending its contract for the Samsung Pay service. However, people can continue to use the Samsung Pay service after registering their credit cards in the Samsung Pay app.
Samsung Pay services linked to credit card companies’ apps are divided into two types. Samsung Card, Hyundai Card, Lotte Card, and Woori Card provided this function as a link. When a customer registers his or her card in the Samsung Pay category within the credit card company’s app, he or she can go to the Samsung Pay app through the link before payment and make offline payments.
Shinhan Card and KB Kookmin Card offered the Samsung Pay Service after directly acquiring magnetic secure transmission (MST) payment licenses from Samsung Electronics. Unlike the link type, in this method, a payment is made through a credit card company app not Samsung Pay Application when a customer pays though the Samsung Pay Service. However, fees paid to Samsung Electronics eclipse those paid through the link type.
Lotte Card and Woori Card explained that they will offer the link-type Samsung Pay Service until 2021 due to a raise in fees and low utilization rates. Customers who mainly use Samsung Pay will use the Samsung Pay Application installed on Galaxy smartphones more often than Lotte Card and Woori Card Applications, so they say they do not need to maintain the link-type service in spite of a rise in fees.
Samsung Electronics said that credit card companies will be able to provide the Samsung Pay Service only when they obtain MST licenses beginning from next year during a service extension consultation process. In other words, the burden of fees will grow for credit card companies that previously chose the link-type method.
On the other hand, Shinhan Card and KB Kookmin Card plan to maintain their existing method. Since the number of offline payments through their own apps is not small, customers will suffer a drop in their benefits if this function is shut down. Shinhan Card explained that the number of Shinhan Play simple payments recently topped 35 million.