Rumors of Apple Pay Introduction Shake Up Domestic Mobile Payment Market...Mixed Expectations and Concerns

Hyundai Card "No Information Available to Confirm"

[Asia Economy Reporter Yoo Je-hoon] Rumors about the introduction of Apple's simple payment service, 'Apple Pay,' are shaking up the domestic simple payment market. While Hyundai Card, the party involved in the rumor, denies it, the industry holds mixed expectations about market diversification if introduced, alongside concerns that it will take a long time to achieve universality.

According to the financial sector on the 11th, Hyundai Card is reportedly negotiating with Apple for about a year to secure exclusive rights to use Apple Pay in the domestic market. Apple Pay refers to Apple's Near Field Communication (NFC)-based simple payment service. Through NFC technology, which transmits and receives wireless data over short distances, payments can be made simply by bringing an iPhone close to the payment terminal.

The high expectations for Apple Pay stem from the fact that many iPhone users have been excluded from the simple payment sector so far. While Samsung Electronics Galaxy users could freely use about 2.8 million affiliated stores nationwide and the entire public transportation network through Samsung Pay, which is based on Magnetic Secure Transmission (MST), iPhone users were limited to some services such as QR payments.

For Hyundai Card, Apple Pay is expected to be a useful means to lock in iPhone users who have been excluded from 'cardless payments.' According to global market research firm Counterpoint Research, Apple's domestic smartphone market share reached about 22% as of the first quarter.

If Apple Pay is introduced domestically by the end of the year, it is expected to be initially available at limited locations such as department stores, large supermarkets, convenience stores, and some franchises. This is because NFC-compatible terminals are being distributed mainly among retail companies. The industry estimates that building a nationwide payment network will cost about 300 billion KRW. Hyundai Card is also reportedly preparing to develop and distribute NFC payment terminals in this regard.

Therefore, the industry believes that it will take considerable time for Apple Pay to achieve universality. A representative from a major card company said, "Even in the US, the origin country, outside urban areas, Apple Pay has not yet achieved the level of universality that MST-based payments have in Korea. It will be difficult to easily replace the 'familiarity' that comes from the payment infrastructure accumulated over more than 20 years since the Kim Dae-jung administration," adding, "For a considerable period, physical cards, MST-based simple payments, QR payments, and NFC payments will inevitably coexist domestically."

However, Hyundai Card, one of the parties involved in the Apple Pay introduction rumors, still denies it. Hyundai Card stated, "We have no information to confirm regarding the rumors about the domestic introduction of Apple Pay."

Meanwhile, some voices are raising concerns about the restructuring of the payment market centered on overseas big tech companies. An industry insider pointed out, "Looking at the current trend, the global digital payment market is likely to become a monopoly dominated by Visa, Apple Pay, and Alipay, and the domestic payment market may also become dependent on this," adding, "It is questionable whether this will be beneficial to consumers."