[Financial IT Talk] Shinhan Card Truly Dedicated to iPhone... Do You Know 'Touch Payment+' That Delivers Samsung Pay Effects?

Even with Apple Pay, massive time and cost required to establish NFC payment network... "They will coexist"

"After launching Touch Payment Plus, what was very surprising was that a YouTuber named Itsub (IT sub), who has no connection with us at all, obtained the device independently and uploaded a review video. There were both positive remarks and criticisms, such as calling it a 'Jjapple Pay' (a knockoff of Apple Pay), but the total views nearly reached 1 million. This indicates that iPhone users have a demand for offline payments similar to Samsung Pay."

Yoo Tae-hyun, Executive Director of Shinhan Card's Digital First Division, stated in an interview with Asia Economy on the 24th about the development direction of Shinhan Card's iPhone Touch Payment: "Through technological innovation, the iPhone Touch Payment Plus device will be made thinner, and the usage scope of Touch Payment M will be expanded."

Shinhan Card's iPhone Touch Payment, released at the end of last year, is a simple payment method that enables offline payments through a device attached to the back of a smartphone without a card, similar to Samsung Pay. There are case-type (1st generation) and wallet-type (2nd generation) devices, and recently it has evolved into 'Touch Payment M,' which attaches a reader to the merchant instead of the smartphone.

Yoo said, "Since Touch Payment Wallet can already be used at about 2.7 million merchants nationwide, we are focusing on making it thinner. With rapid innovation in battery technology, we expect the wallet to continue to become thinner."

Regarding Touch Payment M, which requires a separate reader at each merchant, he added, "We are currently negotiating the introduction of Touch Payment M with some department stores and large discount stores, and are considering expanding to convenience stores and popular restaurants. We are also discussing with related industries ways to enable Touch Payment M through software updates as well as hardware (readers) at merchants. This would increase the merchant network to about 50,000."

Below is a Q&A with Executive Director Yoo.

- How did Shinhan Card develop the iPhone Touch Payment?

▲ I have been using an iPhone for 10 years, and iPhone users wish to go out without a wallet like Galaxy users (Samsung Pay). We thought that if we made some changes to the customer's iPhone, it could be used conveniently like Samsung Pay. So, we developed the Touch Payment Case (1st generation) and Wallet (2nd generation). Also, reflecting the design sensitivity of iPhone users, instead of attaching a device to the smartphone, we introduced Touch Payment M, which attaches a reader to the merchant for payment.

- Could you briefly explain how iPhone Touch Payment works?

▲ Simply put, the iPhone generates ultrasonic waves, which are converted into magnetic fields for payment. We co-developed this technology with a startup called Dansol Plus, which holds ultrasonic technology, and jointly obtained a patent from the Korean Intellectual Property Office in January. Dansol Plus participated in Shinhan Financial Group's startup nurturing program 'Shinhan Futures Lab' and has technology to convert ultrasonic waves into magnetic signals.

- Since Touch Payment M requires a separate reader, its usage scope might not be wide.

▲ We are currently negotiating with some department stores and large discount stores. We plan to expand to convenience stores and popular restaurants. Along with the readers distributed to merchants, we developed software. We are negotiating with major domestic mobile POS companies to enable Touch Payment M use through software updates without attaching separate devices to mobile POS devices mainly used by delivery drivers. A pilot project will start soon. This will instantly increase the merchant network to about 50,000. We are also considering public transportation such as buses and subways.

- If Apple Pay is introduced soon, wouldn't the position of Touch Payment or Touch Payment M become somewhat ambiguous?

▲ Since Apple Pay is an NFC-based service, building nationwide universality will require considerable time and cost. Currently, there are about 100,000 merchants that support NFC payments, which is less than 5% of the total 2.7 million merchants nationwide. It is estimated that building an NFC network for the remaining merchants would cost about 300 billion KRW. Therefore, Touch Payment and Apple Pay will inevitably coexist. For example, Apple Pay can be used at stores with NFC readers, and Touch Payment M can be used where it is not possible. It is like being ambidextrous.

- What is the future direction of the Touch Payment business?

▲ We have filed patents in seven countries overseas and are considering overseas expansion. For example, in the U.S., although Apple Pay has been introduced for a long time, a nationwide NFC payment network has not yet been established. I recently asked an acquaintance living in Los Angeles (LA) about Apple Pay, and he said, "Bro, that’s only in big Silicon Valley malls, not in these rural areas" (laughs).

- The 1st and 2nd generation Touch Payment cases sold out every time they were released. What is the development direction for the 3rd generation model?

▲ The 2nd generation Touch Payment Wallet received good design evaluations, with comments like "It looks like Mac Safe" and "It reminds me of Lamborghini." Especially, the wireless charging function was introduced, reducing inconvenience compared to the 1st generation. For the 3rd generation, as battery innovation is progressing rapidly, we are developing it to be thinner than the 2nd generation.

- What is the future development direction of simple payments after Touch Payment and Apple Pay?

▲ Plastic cards appeared in the payment market 70 years ago, but mobile payments have changed the market landscape in just 7 to 8 years. In the mid to long term, although the virtual currency market is experiencing a major downturn due to the Luna (LUNA) incident, I believe that central bank digital currencies (CBDC) developed by the Bank of Korea, blockchain-based payment methods, and biometric payments using facial recognition will become mainstream.

Reporter Yoo Je-hoon kalamal@