The Korean mobile payment market, currently dominated by Samsung Pay, is predicted to heat up as more rivals are considering joining the race.
Samsung Electronics’ payment service Samsung Pay, which was launched in August 2015, has now garnered more than 1 million subscribers here. The tech giant is expanding the application to its smartwatch Gear S3 and low-budget smartphones, the Galaxy A and J series.
Samsung Pay’s smaller local rival LG Electronics launched a similar service, LG Pay, earlier this month. The payment service is currently only used for its new flagship smartphone G6, but it is expected to be included in its upcoming phone V30.
The race is expected to further heat up as more rivals from the online industry are predicted to enter the market, experts said.
“Samsung Pay’s domination may change in the future as more online firms, Naver, Kakao and Google, may join the race taking advantage of not being bound by a specific handset,“ Kim Jong-dae, a researcher at LG Economic Research Institute, told The Korea Herald.
Currently, the nation’s largest search engine Naver has 21 million subscribers for its Naver Pay. The number of users of mobile messenger Kakao’s Kakao Pay stands at 13 million.
Global firms including Google and Apple are also eying the market. In January, Google Payment Korea, which has partnered with several local card companies, registered as an electronic financial business operator at the Financial Supervisory Service. Apple’s executives also held a meeting with South Korean financial authorities to test the waters before fully reviewing a potential launch here.
Experts say that companies are joining the race not because of profitability but to gain an upper hand in the market.
“Payment services may help companies to control a digital platform by allowing users to search, compare and pay for goods and services. Companies providing more convenient and safer services will dominate the payment market,” said Chung Yoo-shin, a professor at Sogang University’s business college.
The local mobile payment market jumped fivefold to 35 trillion won ($31 billion) last year from 6.6 trillion won in 2013, according to Statistics Korea. This year’s global mobile payment market will grow 25.8 percent on-year to reach $780 billion, according to market research firm TrendForce.
By Shin Ji-hye (firstname.lastname@example.org)