Financial Authorities Approve Apple Pay... Decision Expected Early Next Month

Financial Services Commission "Expecting NFC Method to Spread"

[Asia Economy Reporter Minwoo Lee] Financial authorities have interpreted that the U.S. Apple Inc.'s simple payment service 'Apple Pay' can be offered domestically. It is expected to be available from early next month.

On the 3rd, the Financial Services Commission stated, "Considering relevant laws such as the Specialized Credit Finance Business Act and the Electronic Financial Transactions Act, as well as previous legal interpretations, it has been confirmed that credit card companies can proceed with introducing Apple Pay services by complying with the necessary related procedures."

Along with this, credit card companies were urged not to impose fees or costs related to Apple Pay on customers or merchants while complying with relevant laws. They also added that consumer protection measures should be established, including taking responsibility for damages caused by personal information theft or leakage not attributable to the customer.

Accordingly, Apple Pay is set to make a full-scale entry into the domestic market. Previously, Hyundai Card signed a contract with Apple Inc. in the U.S. and has been preparing for the domestic launch of Apple Pay. The Financial Supervisory Service completed the review of Apple Pay's terms and conditions in December last year.

The industry expects the service launch date to be early next month. The service will be available first at locations equipped with near-field communication (NFC) terminals that support Apple Pay. Convenience stores, Shinsegae Department Store, Lotte Department Store, Starbucks, Paris Baguette, Lotte Hi-Mart, and IKEA are known to have already installed NFC terminals.

With the arrival of Apple Pay, the use of NFC, a contactless method, is expected to increase compared to Samsung Pay's Magnetic Secure Transmission (MST) method. The Financial Services Commission stated, "We expect that the launch of Apple Pay services will enhance payment convenience for general users and promote the development and introduction of new payment services based on NFC technology."

However, there is also a forecast that the 0.1~0.15% fee per consumer transaction that Apple demands from card companies may hinder the spread of the service. Samsung Pay does not have such fees. Introducing terminals to general merchants is also a challenge to be addressed. The NFC terminal penetration rate is still reported to be around 10%.