Consumers get first taste of mobile wallets

By Kim Tong-hyung

Mobile phones are closer to becoming digital wallets, which allow users to keep their cash at home, judging by a slew of new services pushed by mobile operators and credit-card companies.

Pacing the innovations is SK Telecom, the country’s biggest mobile-phone operator, which is collaborating with Hana Financial Group to gather customers for their new Hana-SK credit cards.

The eventual goal of the duo is to have phones double as plastic and allow users to make a variety of payments.

The companies’ first attempt is represented in “Touch S,” a payment application enabled on the popular Samsung Electronics smartphone, Galaxy S, which is exclusively available to SK Telecom subscribers.

SK Telecom and Hana will have to fend off a dual threat coming from each of their traditional business boundaries, as rival telecommunications operators and financial service companies push their own aspirations for the mobile wallet.

Shinhan Card, the local credit card king, has partnered with KT, SK Telecom’s bitter telecommunications rival, to launch the “Show Touch” payment services last month to be used on the carrier’s phones.

Shinhan has a relationship with SK Telecom, as the two companies, along with discount retailer, Homeplus, launched “Smart Pay” services for SK Telecom users recently. KT intends to respond by expanding its Show Touch applications to cover Lotte and KB card users.

But according to some observers, the real battle for the market of virtual wallets hasn’t even started yet. All eyes are on KT as it attempts to acquire a commanding share in BC Card, which currently manages credit cards issued by 11 local banks and controlled about 40 percent of the market by revenue last year.

“Telecommunications companies and credit card companies are a natural fit as business partners, as both of their businesses are based on data security and payment management. This suggests that the mobile wallet has a chance to become the norm somewhere down the road,” said a KT official.

SK-Hana Card is allowing Touch S members to use their chip-embedded handset for payments in about 700,000 outlets in the country, including SK Energy gas stations, Family Mart convenience stores and some Homeplus malls in Seoul.

Users can easily pay by just swiping their Galaxy S phones against the readers equipped at the shops, with the radio antennas inside the handset broadcasting the information stored in the device’s universal subscriber identity module (USIM) chips.

KT’s Show Touch works essentially in the same way, although the carrier is trying to differentiate by allowing users to use a wider variety of credit card services on their handsets.

The potential for the mobile wallet appears immense in Korea, home to one of the planet’s highest mobile penetration rates and where wireless users are already accustomed to using their handsets for small value payments and as travel passes. And banks have been enjoying a quick increase in customers for their electronic banking services provided on mobile phones.

Using phones to purchase goods and services, as well as paying phone bills, taxes and hospital charges, is an intriguing idea in a country where the average person uses four or more credit cards.

Recent surveys suggest that people aren’t feeling comfortable about leaving their bulky wallets at home. Mobile operators and credit card companies still need to expand the coverage of their digital payment services and also consider ways to quell the fuss over security concerns.

And when the phones start to masquerade as credit cards and banknotes, the thought of lost or stolen devices becomes dramatically scarier.

A survey of more than 11,000 adults by Internet site, Card Gorilla (www.card-gorilla.com), said about 43 percent of respondents would prefer their old plastic cards regardless of the digital innovations, while only 12 percent said they are considering to use “mobile cards” extensively.

구매자들이 처음으로 맛보는 휴대폰 지갑

휴대폰이 점점 더 전자지갑으로 변하고 있다. 사용자들이 현금을 집에 놓고 휴대폰으로 모든 결제를 할 수 있게 됐다. 이번 SK 텔레콤은 “Touch S” 라는 지불 어플리케이션을 삼성에서 만든 갤럭시 S 폰에 쓸 수 있게 했다.

국내 신용카드 선두주자인 신한 은행에서는 KT에 “쇼 터치” 라는 지불 어플리케이션을 같이 도입했고 SKT에는 “스마트 페이” 라는 홈플러스에서 할인 적용되는 어플리케이션을 도입했다.

SK-하나 카드는 전국에 약 70만개의 상점에서 “터치 S”를 가게마다 있는 단말기에 갤럭시 S 핸드폰을 갖다 대면 결제가 되는 칩을 선보였다.

휴대폰 지갑의 잠재력은 한국에서 엄청날 것으로 보인다. 이미 이용자 일부는 소량의 지불에 쓸 수있는 휴대폰 지갑을 사용하고 있고 은행들도 휴대폰 지갑으로 인해 급증하는 고객들로 이득을 보고 있다.

평균 3~4개의 신용카드를 쓰는 한국에서 모든 것을 핸드폰 하나로 지불할 수 있다는 것은 아주 흥미로운 아이디어다.

하지만 한 조사에 따르면 성인 1만1,000명을 상대로 조사한 결과 43%가 그래도 아직 플라스틱 신용카드를 쓰겠다는 응답을 받았다.