By Cho Jin-seo
Staff Reporter
KTF said Wednesday that its customers will be able to shop overseas with their mobile phones from next year, just as they do with credit cards.
The mobile-phone payment service has been available in some shops, restaurants and on public transportation in South Korea for years, but it is the first time that cross-border transactions have been made possible.
KTF CEO Cho Young-chu demonstrated the ``Pay-Buy-Mobile'' system during the Mobile Asia Congress being held in Macau, Tuesday. He monitored real-time mobile payment transactions taking place in South Korea, Taiwan and the United States via the network of MasterCard.
The so-called mobile wallet phones carry electronic chips planted inside. When the user takes the phone close to the terminal, it detects the chip and processes the transactions through the networks of credit card companies Visa and MasterCard.
``It is basically the same as a credit card,'' said a company spokeswoman in Macau. ``The function of credit cards is embedded in the USIM (Universal Subscriber Identity Module) card inside the mobile phone.''
Though KTF and its partners have shown the technological feasibility, the global mobile payment system is not likely to bring huge profits in the near future.
Korean telecom firms have spent massive amounts of money in setting up similar systems throughout the country under various brands such as Moneta and K-merce. But the use of such services has been less than the firms' expectations because shoppers seldom feel it necessary. SK Telecom estimates that only a quarter of its subscribers are registered for the Moneta service, and the number of actual users is probably even lower. Only around 80,000 terminals have been distributed to shops, cafes and restaurants, making it hard for it to be a reliable, ubiquitous method of paying, according to the Association of Global Standards in Mobile Communications (AGSMC).
Building an international standard is another hurdle. There are 35 telecom operators, representing more than 1.3 billion mobile phone users, but the test services are only underway in a few nations such as Taiwan and the United States, according to KTF.
The ambitious international project was initiated in February with KTF taking the lead role.
Over the next few months, 12 mobile operators are to run trials of four mobile payment services in Australia, France, Ireland, South Korea, Malaysia, Norway, The Philippines, Singapore, Taiwan, Turkey, and the United States, the AGSMC said.