By Kim Tong-hyung
Staff Reporter
Mobile phones are closer to becoming digital wallets, following increasing collaboration between mobile telephony operators and credit card companies.
Leading the way are SK Telecom, the country's biggest wireless carrier, and the Hana Financial Group, as they put their weight behind the new credit card company Hana-SK Card and look to introduce new ways of paying for goods using mobile devices.
Sometime around mid-March, Hana-SK Card will introduce a ``smart payment'' service backed by discount retailer, Home Plus, which will allow customers to buy products with their handsets and also receive real-time shopping information in text messages and download discount coupons.
``We changed the previous name of our credit card company (Hana Card) to Hana-SK Card to take strengthen our brand image through the reputations of both Hana and SK brands,'' Lee Kang-tae, the chief executive of Hana-SK Card, said in a news conference at the Lotte Hotel in Seoul.
SK Telecom spent around 400 billion won (about $348 million) to own 49 percent of Hana's renewed credit card unit. The SK Telecom-Hana connection is just one of many partnerships emerging between telecommunications and financial service companies as mobile wallets start to take shape.
KT, the country's biggest telephone company and No. 2 wireless carrier, has confirmed its interest in acquiring BC Card, eager to match the credit card aspirations of its bitter industry rival, SK Telecom.
BC Card, established in 1982 on a joint investment by local banks, currently manages the credit cards issued by its 11 member banks. The 11 institutions combine for slightly less than 40 percent of the credit card market in revenue.
Regardless of its talks with KT, BC Card has been showing interest in tapping the emerging market for mobile payment. BC Card is planning to introduce a digital credit card service that will be enabled on the microchip-embedded third-generation (3G) handsets.
The goal is to garner around 100,000 users by the end of the year, according to BC Card, which is also working with the state-run Electronics and Telecommunications Research Institute (ETRI) to develop a ``mobile card,'' designed to double as a credit card and personal identification card, by 2013.
Shinhan Card, the country's biggest credit card company, was the first to provide mobile credit card services to 3G users, and currently has garnered around 2,500 customers from SK Telecom and KT.
KB Card, owned by the KB Kookmin Bank, is working with KT to introduce a mobile payment service sometime during next month.
The emergence of the mobile payment market also seems to be sparking interest from foreign credit card companies.
Visa plans to hold a news conference in Seoul next month to introduce ``payWave'' and the company's other mobile payment solutions.
KT and SK Telecom, who combine for around 80 percent of the country's mobile telephony users, are both hoping that their massive subscriber pools will allow them to hit the gold trail in credit card services.
The more tech-savvy mobile users are already using their micro-chip embedded handsets to wire money to banks or pay for public transportation, and adding credit card functions is expected to be the last and most important piece of the mobile wallet puzzle.
Hana Card had been struggling to stay relevant in the credit card market, where it commands a share of less than 7.4 percent, but tapping into SK Telecom's 24 million customers and massive sales network may allow it to pack a larger punch.
BC Card is considered an ideal acquisition target for KT, as its member banks combine for about 39 million credit card customers and a massive sales network consisting of around 2.5 million shops.
thkim@koreatimes.co.kr
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