Local IT Giants Fighting to Capture Mobile Payment Market
According to Korea Information Society Development Institute (KISDI) on June 21, the domestic mobile payment market has shown a steady increasing trend, already exceeding 3 trillion won (US$2.71 billion) in the first half of last year. Domestic payments have steadily increased every quarter from 1.127 trillion won (US$1.02 billion) in the first quarter of 2013 to 2.355 trillion won (US$2.13 billion) in the fourth quarter of the same year. Also, it posted 3.193 trillion won (US$2.88 billion) in the second quarter of last year.
In such a market expansion, the war among large information communication technology (ICT) companies begins in the payment market.
Naver has set out a strategy to strengthen its substantial services through a synergy effect with existing services, including mobile shipping. The company will unveil Naver Pay on June 25, which allows users to pay online at a large number of small and medium sized online shopping malls with a single Naver acｃount.
Naver Pay has joined hands with 50,000 partner stores, showing a limitless product database. Also, it is expected to be widely used due to its access convenience enabling users to pay online with a single Naver acｃount without any additional log-in process.
Daum Kakao first ignited the competition in the payment market by rolling out its mobile payment Kakao Pay, and it is extending its business field in a different way.
Daum Kakao already signed a memorandum of understanding with the state-run Korea Electric Power Corporation (KEPCO) and Seoul City to develop a new mobile payment system which will allow users to make local tax payments to Seoul City, and also electricity bills, residence taxes, property taxes, and auto taxes, via Kakao Talk. Also, Kakao Pay will have greater access considering the fact that the company can build a foundation in the online to offline (O2O) market with its ongoing project Kakao Taxi, that will be combined with Kakao Pay.
As the company is showing the increase in a limited number of partner stores, which was considered its weak point, Daum Kakao seems to use the simple payment system as a catalyst to promote Internet mobile banks. Currently, the company is releasing partnership services of Kakao Pay with numerous banks, expanding the joint contact area with banks.
Samsung Electronics is set to unveil its new mobile payment system Samsung Pay in Sept. Initially, the company considered releasing the system in July, but it decided to delay the date in time for the launch of its next-gen flagship model, the Galaxy Note 5. Since Samsung Pay will introduce both magnetic secure transmission (MST) and near field communication (NFC) technologies, it can be used in almost every store.
Also, Samsung Electronics has an ambition to make an “electric wallet” that can save all credit card information in one place. Samsung Electronics Vice President Rhee In-jong said in the Samsung Electronics’ Investors Forum 2015 on June 3, “You have not only credit cards but also some franchise cards, membership cards, gift cards, coupons, and receipts in your wallet. Samsung Pay will slim your fat wallet with all those cards.”
Samsung Pay is also expected to play a role as an identification card. Using the Samsung’s security platform KNOX, it will replace an access card and an ID card.
Article Source: http://www.businesskorea.co.kr/article/11110/payment-market-war-local-it-giants-fighting-capture-mobile-payment-market
Image Source: https://media.licdn.com/mpr/mpr/p/1/005/094/254/361c6dc.jpg
VOCABULARY WORDS:
1. Synergy (n.) ~ the interaction or cooperation of 2 or more organizations
2. Unveil (v.) ~ show or announce publicly for the first time
3. Ignite (v.) ~ to arouse the passion of excite
4. Catalyst (n.) ~ a substance that increase chemical reaction
5. Numerous (adj.) ~ many
QUESTIONS FOR DISCUSSION:
1. What are the different online payment services in Korea?
2. Which one do you prefer to use? Why?
3. What are the advantages and disadvantages of paying online?
4. How does the online paying services affect the spending habits of Korean people?
