Watchdog's pushback on Samsung Wallet fees raises fairness questions

Financial Supervisory Service (FSS) Gov. Lee Chan-jin speaks during a press conference at FSS headquarters in Seoul, Thursday. Yonhap

Financial authorities’ intervention to curb Samsung Electronics’ plan to impose fees on card issuers using its digital wallet platform is stoking debate over market fairness and regulatory consistency.

Financial Supervisory Service (FSS) Gov. Lee Chan-jin warned Thursday that if a platform used by more than 18.6 million people begins charging card issuers, the burden is likely to squeeze card companies’ margins and ultimately filter through to consumers in the form of higher fees or reduced benefits.

The remarks come as Samsung seeks to shift away from the no-fee model for Samsung Wallet (formerly Samsung Pay), while Apple Pay, which has charged its sole partner, Hyundai Card, a per-transaction fee of around 0.15 percent since its launch in Korea in 2023, is moving to expand to additional card issuers.

Samsung Wallet, which allows users to make payments using compatible Samsung smartphones and devices, has operated without charging card issuers since its launch in 2015.

Seeking to change this policy, the Korean tech giant has pointed to a lack of fee parity with its rival, bringing the issue back into focus.

Lee said users of Samsung smartphones tend to view Samsung Wallet as a built-in feature.

“Once card issuers are charged, those costs are inevitably passed on. Users may not pay directly, but in the end, the burden would be reflected in pricing," Lee said at a press conference in Seoul.

The watchdog was earlier reported to have summoned officials in charge of mobile payment services from eight major card companies, where it likened Samsung Wallet to a “public good” in the domestic market and asked to be notified should Samsung Electronics move to introduce fees.

“We are simply conveying these concerns to the company,” Lee said, effectively confirming the watchdog’s stance.

Critics note FSS’ move as an unusual level of government involvement in the pricing of a private platform. The backlash has been amplified as authorities have raised no comparable concerns over Apple Pay’s fee structure.

Although Samsung Wallet was widely expected to follow suit after Apple Pay’s arrival in 2023, the company instead doubled down on its no-fee model, citing its commitment to fostering the domestic payments ecosystem and sustaining cooperative ties with local issuers.

But the landscape is shifting as Apple Pay began seeking to expand its partnerships to Shinhan Card and KB Kookmin Card last year.

Apparently mindful of criticism over excessive intervention, Lee stressed that any decision on fees ultimately rests with Samsung Electronics and falls outside the scope of direct regulatory intervention.

“How Samsung Electronics proceeds is, in the end, up to the company,” he said. “It is a business decision, not something we can directly step in on.”