Samsung Pay encroaches fast into Korean financial market


Photo courtesy of Pulse/Maeil Business News Korea

By Chung Ji-sung, Maeil Business News Korea

Samsung Pay, an electronic wallet service developed by global electronics giant Samsung Electronics Co., is expected to further tighten its grip over the local mobile payment market.

Photo courtesy of Pulse/Maeil Business News Korea

According to finance industry sources on Sunday, four Korean banks including KB Kookmin Bank, Shinhan Bank, Nonghyup Bank and Industrial Bank of Korea (IBK) plan to provide digital wallet services using Samsung Pay when Samsung’s new Galaxy S7 smartphone makes a public debut at home on Mar. 11. Once the four banks join hands with Samsung for the mobile payment platform, customers of total five local banks will be able to use various mobile transaction services using Samsung Pay including Woori Bank. KEB Hana Bank, another major commercial bank in Korea, is also known to be mulling on joining the group.

Bank services using Samsung Pay, a digital wallet service that allows Samsung mobile device users to pay for purchases without actual magnetic stripe cards, are currently available only through Woori Bank that entered into an exclusive agreement with Samsung Electronics for the mobile payment service last August. As the contract is about to expire next month, other local banks can offer their own electronic wallet platforms using Samsung Pay.

IBK, among all local banks newly entering into partnership with Samsung Pay, is most aggressive in making its Samsung Pay-based financial service available to its customers. The state-run bank announced earlier last week that IBK Samsung Pay will start its service when Samsung Galaxy S7 is released next month. Users of IBK Samsung Pay service will be able to withdraw or deposit money at IBK’s automated teller machines (ATMs) via the near field communication (NFC) technology. Moreover, it will also function as a debit card, enabling its user to pay for purchases in real time through an IBK Bank account linked to the mobile wallet at all BC card affiliated stores.

Other banks, on the other hand, will provide limited mobile financial services in the earlier stages and expand Samsung Pay-based financial services within the second half of this year. KB Kookmin Bank and Shinhan Bank plan to offer cash withdrawal and deposit services at first while Nonghyup will only provide a mobile payment service for now.

A rapid increase in the number of Samsung Pay users at home has prompted local banks to form a coalition with Samsung Pay. In just about six months since Samsung Pay was introduced, more than five million people have subscribed to the mobile payment service and its accumulated transaction value has exceeded $500 million, according to the tech giant.



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