|Apple Pay uses Near Field Communication (NFC) technology to enable contactless payment between a device and payment terminal. But Korea has yet to set up an NFC payment network. gettyimagesbank|
By Kim Bo-eun
Talk of Apple Pay launching in Korea in partnership with a local credit card company is drawing interest to just what has prevented the entry of the tech giant's payment service here, since its introduction in 2014.
In Asia, Apple Pay is available in mainland China, Japan, Taiwan, Hong Kong, Singapore and Malaysia. Questions have been raised over why Korea, where iPhones account for about 20 to 30 percent of the smartphone market, has not yet launched Apple's payment service.
Apple Pay uses Near Field Communication (NFC) technology to enable contactless payment between a mobile phone or watch and a payment terminal.
Most stores here, however, are not equipped with NFC payment terminals, as they mostly use IC card terminals used to make payments with credit cards. According to media reports, talks between Apple and credit card firms did not progress as the financial companies were not willing to pay to set up the NFC payment network.
There may have been less incentive for credit card companies, considering the dominance here of Samsung Pay offered by Samsung phones.
Samsung Pay's adoption has been backed by the smartphone vendor's dominant position in the local market. Samsung accounted for 72 percent of the local smartphone market last year, according to data from market tracker Counterpoint Research. Samsung's share grew from 65 percent in 2020, as the company attracted users of LG Electronics' phones after LG exited the mobile phone market last year.
Samsung Pay was also the most-used financial services app among Koreans in June, according to data compiled by Wiseapp, with a total of 15.27 million users.
Samsung Pay was easily adopted because the contactless payment system can be used with existing IC card terminals at stores. Financial firms also had no reason not to partner with Samsung Pay as it does not require them to pay fees. Apple Pay, on the other hand, collects up to 0.15 percent from every transaction from banks and credit card firms. The fee percentage has varied by country, with the percentage for Israeli financial firms being set at 0.05 percent.
Some media has reported that Apple Pay has partnered with Hyundai Card in order to offer its service here.