Lotte Group chairman Shin Dong-bin is seeking to aggressively expand the use of his firm’s new mobile-based payment system, highlighting his ambition to take a lead in the fast-growing mobile market.
Lotte’s new payment feature in its mobile app L-Pay is a key tool designed to realize the group’s vision of an omnichannel shopping system.
Lotte Group chairman Shin Dong-bin (Yonhap)
Lotte has been focusing on building an integrated shopping channel -- including online, off-line and mobile app based purchasing -- calling it a new growth engine to generate new profits in the already saturated retail market.
“L-Pay is a great asset for the group,” said Shin in a recent internal meeting, according to media reports. “We need to expand the size and (improve) the quality of L-Pay so that customers can experience the convenience the service offers anywhere they go.”
Lotte Group, while confirming the meeting refused to give details.
L-Pay system enables customers to use not only Lotte card but also other credit cards through a mobile app downloaded on their mobiles. The service is being seen as Lotte’s attempt to diversify its business portfolio in the finance sector.
Shin, in a forum last year, said that the group was seeking ways to make inroads into fintech, an emerging financial service that offers easier payment solutions by the use of IT devices or technology.
In the meeting, the chairman also asked executives to study ways of forging partnerships with related businesses to strengthen the competitiveness of L-pay.
Currently, L-Pay has signed partnership with eight credit card companies including Shinhan Card, KB Kookmin Card and Samsung Card. The company also plans to launch new payment system that allows customers to transfer their money through their cellphones without having to use security cards and certificate verification process and apply new field communication technology to its payment system.
Shin’s imperatives on the new payment system comes amid intensifying competition in the mobile market, both in and out of the country. The online and e-commerce market here has been rapidly growing from 38 trillion won in 2013 to 54 trillion won in 2015.
Lotte appears to be moving fast to expand its digital wallet services in recent months out of concerns that it may lose a lead in the mobile market to its rivals, after spending months dealing with negative issues such as the ugly succession battle the chairman went through against his elder brother and father as well as the controversial construction of skyscraper Lotte World Tower in southern Seoul.
While Lotte was tied up with negative issues, Shinsegae, the nation’s second-largest retailer, and others moved fast to tap mobile market.
Shinsegae launched its SSG pay in July while its follower Hyundai Department Store introduced H Wallet three months later.
SSG Pay has secured more than 1.4 million users, attracting more than a combined 20 billion won deposited in accounts, according to industry watchers.
By Cho Chung-un (christory@heraldcorp.com)