Apple Pay service starts in Korea

The Korea Times

The Korea Times

Finance

Tue, September 26, 2023 | 05:22

Companies

Apple Pay service starts in Korea

Posted : 2023-03-21 16:29

Updated : 2023-03-22 09:12

Hyundai Card Vice Chairman and CEO Chung Tae-young speaks during a press conference held at Hyundai Card UNDERSTAGE in Hannam-dong in Seoul, Tuesday. Courtesy of Apple

Hyundai Card to focus on expanding affiliated stores for wider use of Apple Pay

By Anna J. Park

Apple began its near-field communication (NFC) based mobile payment service, Apple Pay, in Korea, Tuesday, under a partnership with Hyundai Card, the country's third-largest credit card company.

After registering their cards on Apple Pay, Hyundai Card users can make payments at stores with their iPhones, iPads, as well as Apple Watch. Mac users can also pay through Apple Pay through the Safari web browser.

"I met my first iPhone 16 years ago, and it has changed and affected millions of lives, including mine. And I am gladly announcing that Apple Pay, an integral function of iPhone, is finally available for users in Korea. I'd like to thank all of those who put efforts into the launch," Hyundai Card Vice Chairman and CEO Chung Tae-young said during a press conference held at Hyundai Card UNDESTAGE located in Hannam-dong in Seoul, Tuesday.

"The adoption of NFC readers in Korea, the most developed type of reader out there, will ignite the development of various payment services in the country and will become an inspiration for local startups. With the new, fast, easy-to-use, and most secure access to mobile payments being available, our lives will become much more convenient," the chief of Hyundai Card highlighted, stressing that Apple Pay's official launch has set an important milestone for the payment business in Korea.

The CEO also said more than 170,000 people have already registered their Hyundai cards on their iPhones for Apple Pay as of Tuesday morning.

Chung said his company will expand the number of affiliated stores equipped with NFC readers to expand the use of Apple Pay in the country.

Duncan Olby, Apple's senior director for Apple Pay & Wallet for International Markets, speaks during a press conference held at Hyundai Card UNDERSTAGE in Hannam-dong in Seoul, Tuesday. Courtesy of Apple

"Users can start playing with Apple Pay at convenience stores like CU or GS25, coffee spots like Paul Bassett, department stores like Lotte Department Store, or supermarkets like Costco. Our merchant partners account for more than 50 percent of all the transactions made by Hyundai Card users today and of course we're adding more and more of merchants every day," Duncan Olby, Apple's senior director for Apple Pay & Wallet for International Markets, said during the press conference, adding that he's thrilled and excited that the payment service is finally available in Korea for its loyal customers.

He also stressed that the innovative mobile payment launched back in 2014 in the U.S. has not only brought ease and convenience for users in over 70 countries across the world, but also guarantees the highest level of privacy and security for users with its cutting-edge cryptic technology.

For instance, the number of users' credit or debit cards will not even be recorded in their Apple devices. Instead of relying on card numbers, Apple Pay creates a full device account number (DAN), which will then be encrypted and saved as a secure element in chips for usage. That way, Apple does not and cannot track users' distinctive purchase patterns or records.

An employee demonstrates how Apple Pay can be used on an NFC reader at Hyundai Card UNDERSTAGE in Hannam-dong in Seoul, Tuesday. Courtesy of Apple

With Apple Pay becoming available in Korea, market watchers expect the global tech giant's mobile payment service will account for around 15 percent of the local mobile payment market.

The latest report published by Counterpoint Research forecasts that, although only about 10 percent of merchant affiliates of credit or debit cards in the country are equipped with NFC readers, the number of merchants equipped with the devices will increase quickly throughout the year.

The report also predicts that about seven million people, or 55 percent of 12.8 million iPhone users in Korea, will shift to Apple Pay, as their main platform for mobile payment services. The total amount of daily transactions through Apple Pay in Korea is also expected to exceed 100 billion won ($76 million) by the end of this year.

However, market watchers view that Apple Pay is not yet likely to pose a major threat to Samsung's current dominance in both the local smartphone market as well as mobile payment services. Apple Pay's unavailability in transportation cards will remain an obstacle in garnering more users across the country.

In addition, Samsung is actively forming partnerships with both Naver Pay and Kakao Pay, two major online payment services, to extend their reach to counter Apple's threat to their dominance.

annajpark@koreatimes.co.kr