Competition over mobile payment services heats up

By Yoon Sung-won

Daum Kakao’s Bankwallet

Tougher competition is brewing in the mobile payment services sector since Samsung Electronics and Naver jumped on the bandwagon.

Samsung Electronics, the world’s top handset maker, recently said it would launch a mobile payment service in cooperation with local mobile payment service provider Yelopay as well as six commercial banks including Kookmin Bank, Shinhan Bank, Yoori Bank, NH Nonghyup Bank, Citibank and Korea Post, starting at the end of this year.

Samsung said its service would be available on “Samsung Wallet,” an application pre-installed on all Samsung Electronics’ Galaxy smartphones, and would support remittance and payment functions.

Samsung said transfers would be available only between Samsung smartphone users, and no commission would be charged. The company plans to expand its partnerships with more local commercial banks.

It has also worked with card companies including Samsung Card and Shinhan Card to connect their mobile credit card applications to Samsung Wallet to support both online and offline payments using mobile devices. Samsung Electronics did not disclose details or an exact timeline for the service.

At a conference in Tokyo on Oct. 9, LINE, a Japan-based mobile service affiliate of the nation’s largest Internet service provider Naver, unveiled a mobile payment service dubbed “LINE Pay.”

The company said that the service would be provided on its instant mobile messenger service “LINE,” and would support mobile payment and bank transactions.

Launched in June 2011, LINE is provided in 17 languages and had about 560 million global users as of October, with an estimated 10 million users in Korea.

“We plan to launch the mobile payment service within this year, although the exact schedule is not yet final,” Naver chief financial officer Hwang In-joon said on Oct. 30.

Daum Kakao, operator of the nation’s largest instant mobile messenger service KakaoTalk, launched its mobile payment service Kakao Pay on Sept. 5.

Thanks to Kakao’s dominant position in the local mobile messenger market, it has attracted more than 1.2 million local users in a month while expanding cooperation with more local partners, including credit card companies, major online shopping malls and social commerce service providers.

Adding to this, Daum Kakao will roll out a mobile banking and payment service on Nov. 11 and provide money transfers, payments and cash withdrawal services, which are similar to those of Samsung and Naver.

The participation of major Korean IT companies in the mobile payment segment is in line with the sharp growth of the market in the United States and China, where IT giants such as Google, Apple, eBay, Alibaba and Tencent are vying for an early lead.

According to global market researcher Gartner, the global volume of mobile payments totaled $235.4 billion in 2013 and is expected to climb three-fold growth to $721 billion by 2017.