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.
Mobile payments surpass card use for first time in Korea
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By Anna J. Park
Mobile payments surpass card use for first time in Korea
Kim Ye-jin, a 31-year-old office worker, increasingly relies on her cell phone for daily transactions instead of traditional cards.
From public transportation fares to payments at convenience stores, she primarily utilizes a variety of mobile apps stored on her cell phone instead of relying on cards.
"I do carry plastic cards to make payments mostly at small restaurants that do not have the latest devices required to approve payments through mobile phones," Kim said, adding that she also enjoys receiving benefits, such as higher discount rates, offered by various mobile payment service providers.
Kim embodies a shifting trend among Korean consumers, who are increasingly relying on their mobile phones while reducing their dependence on carrying multiple credit and debit cards as they did in the past.
According to the annual domestic payment trend report released by the Bank of Korea (BOK) earlier this week, the proportion of payments made using mobile phones out of total card transactions last year reached 50.5 percent.
It was the first time in Korea that the proportion of payments made through mobile devices exceeded that of card payments, which stood at 49.5 percent. Since reaching 38.6 percent in 2019, the prevalence of mobile payments has steadily increased over the past few years, surpassing the usage of cards in transactions.
A customer uses Apple Pay to buy a drink at a cafe in downtown Seoul. Yonhap
A notable aspect of the increased payments through mobile devices is the significant rise in the proportion of offline transactions.
Last year, the volume of offline transactions out of all mobile payments surged 35.7 percent compared to a year ago. In contrast, online transactions via mobile devices increased only 5.6 percent over the same period. This indicates a burgeoning shift where mobile-based payments, previously focused primarily on online transactions, are now more widely utilized for everyday transactions at offline establishments.
Big Tech, phone makers boost payment service market share
Against this backdrop, card companies are now grappling with the challenge of maintaining their market share amid intensified competition from big tech companies and phone manufacturers.
Big tech companies have been expanding their market influence in both online and offline card transactions. Korean consumers utilized three major fintech payment services — Naver Pay, Kakao Pay and Toss Pay — for payments totaling 75.5 trillion won ($55.4 billion) last year. This marks a 677.7 percent increase over the past four years, when the aggregate payment size stood at 9.7 trillion won in 2019.
Market watchers anticipate that this trend will become more pronounced in the coming years, especially considering the possibility that Apple Pay might be adopted by other major card companies besides Hyundai Card — the sole partner in Korea of the global mobile payment system thus far — as early as late this year.
Once other major card companies accept Apple Pay, mobile payment services developed by phone manufacturers, such as Apple and Samsung, are estimated to surpass card companies in terms of the mobile payment market share.