Business
Korea to bolster new system for mobile payment
Published : Mar 29, 2011 - 18:06
Updated : Mar 29, 2011 - 18:06
The government, telecom operators, handset makers and credit card companies are teaming up to expedite the development of a new mobile payment technology.

The Korea Communications Commission announced Tuesday the launch of a coalition to foster near-field communication technology, which allows shoppers to apply their mobile devices to an electronic reader at the check-out to pay for goods and services directly from their bank account.

Members of the group, called Grand NFC Korea Alliance, include mobile carriers such as SK Telecom, KT Corp. and LG Uplus, phone manufacturers such as Samsung Electronics, LG Electronics and Pantech, and credit card issuers like Hana SK Card, BC Card and Shinhan Card. State-run research institutes will also give support in setting up policies.

This type of contactless payment system already exists here but companies around the world have been trying to broaden its use to ticket purchase, coupon issuance, personal identification, traveling information and others.

Multinational electronics and telecom giants including Google, Apple, AT&T, Verizon of the U.S. and Orange of France have also dived into the competition.

But Korean developers were caught up in a snag for more than 10 years due to a lack of handsets and discord of interests between industries.

Under the joint project, the participants plan to standardize the technology, develop and test-run business models and establish infrastructure, the KCC said.

They aim to increase supply of mobile payment readers and beef up the slice of NFC-embedded gadgets to 60 percent in the mobile phone and tablet market by 2015.

NFC-based services would generate 1.34 trillion won ($1.2 billion) in production, 347.5 billion won in value-added effects, and more than 5,700 jobs here over the five years, according to the Electronics and Telecommunications Research Institute.

“The NFC technology will provide various business models and enable mobile services to evolve to smart life services that stick closely to everyday life, by putting functions such as traffic, credit card and retail into a mobile phone,” the KCC said in a statement.

“Given that the market is on the verge right now, Korean firms will be able to stand out on the global stage by improving technology competitiveness.”

IE Market Research values the global NFC-related market at $1.13 trillion in 2014, accounting for a third of the total mobile transactions.

By 2015, about 85 percent of the mobile phones worldwide will be equipped with NFC chips, H.I. Business Partners also predicted.

By Shin Hyon-hee (heeshin@heraldcorp.com)
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