Anna Jiwon Park has been covering the politics at The Korea Times since the summer of 2024, when she joined the press pool for the Office of the President in Korea. Prior to that, she spent about five years reporting extensively on financial markets, regulatory authorities and the financial industry. She joined The Korea Times in 2019 after spending eight years as a broadcast journalist at Arirang TV, Korea’s leading global broadcaster, covering politics, defense and culture.
Online payment market reaches saturation point in Korea: Samjong KPMG
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By Anna J. Park
A recent report on Korea's online payment markets underscores the need for building a strategic partnership and providing differentiated services on the part of payment companies. Currently, online payment services in Korea are provided by a wide variety of parties, including credit card companies, big tech firms, fintech companies, telecommunications companies, online shopping malls and more.
According to the report titled "The era of fierce competition in online payment" published by Samjong KPMG on Wednesday, the average number of daily transactions during the first half of this year stood at 26.28 million, while their average daily transactional volumes amounted to over 841 billion won ($646 million). An increase of 13.4 percent and 16.9 percent, respectively, compared to the same period last year.
As of the first half, the most frequently used modes of online payments are by pre-registered credit cards at online payment platforms (61.3 percent), followed by advance payment (32.7 percent), and pre-registered bank accounts (6 percent). Notably, the usage of pre-paid methods, either by advancement charging or bank accounts, is on the rise.
The report also presented five major characteristics of the domestic online payment market: intensified competition; expanded offline usages; business expansion; changes in payment methods and diversified strategies. Such features are well shown in active partnership formations among major online payment providers themselves, such as Samsung Pay, Naver Pay, Kakao Pay, Toss Pay, Zero Pay and more, to build a more closely-knit network of payment systems for the sake of increasing customer convenience.
As a result of the fierce competition and partnerships, some businesses, such as SSG Pay, Mirae Asset Pay or LG Pay, are either in the process of being sold to other companies or termination of operations from the market, due to declining profitability. On the other hand, companies like Musinsa or Hyundai Motor are strengthening their own online payment services.
"Given the already-saturated online payment market in the country, it is important for payment providers to bring about differentiated services, while increasing their base of loyal consumers. Consequently, strategic collaboration and investment for business expansion, improvements in payment conveniences for domestic and international consumers, as well as expansion into other related financial services should be considered by payment service providers," an official from Samjong KPMG explained.