S.Korean financial regulator reviewing Apple Pay service for launch

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IANS | 24 Nov, 2022
South Korea's financial regulator is currently reviewing terms and conditions for the Apple Pay service for launch in the country.

Hyundai Card is expected to introduce Apple Pay pilot service within this year at the earliest.

With the advent of Apple Pay, the second-largest global payment company, interest in the related industry is growing as to whether there will be a change in the structure between credit card companies and financial platforms as well as the domestic simple payment market, reports Yonhap news agency.

According to the financial authorities, Hyundai Card recently applied for review of terms and conditions for the introduction of Apple Pay.

The Financial Supervisory Service is currently reviewing terms and conditions for the service in multiple related departments.

An official from the Financial Supervisory Service explained, "We are reviewing the contents of the Apple Pay service requested by Hyundai Card in consultation with various departments." "We will be able to reply to them soon."

As of the end of last year, Apple Pay, Apple's easy-to-use payment service, ranked second in the global payment volume, surpassing Alipay and MasterCard.

However, the industry's consensus is that the service's impact on the domestic card payment industry will be negligible for the time being. This is because only 10 per cent of the 2.9 million domestic credit card merchants have NFC (Near Field Communication)-based terminals that Apple Pay is adopting.

Most domestic offline simple payment services are MST (Magnetic Secure Transmission), which transmits information through magnetic devices. Samsung Pay supports both MST and NFC, but Apple Pay uses only NFC.

Of course, as the iPhone forms an unrivaled mania, there is a possibility that the supply of NFC-based terminals will increase depending on the impact of Apple Pay in the future.

However, it is known that Apple is demanding payment fees equivalent to more than 0.1% of the consumer's usage amount from credit card companies, and the prevailing prospect is that it will be difficult for Apple Pay to spread.

In addition, it is also a subject of controversy that the card company that introduced Apple Pay is discussing the conditions for paying an additional 5 to 10 won per transaction to Visa and Master Card as royalties.

An industry insider pointed out, "Although the details have not yet come out clearly, it is true that the burden of fees requested by Apple is relatively large."

As a result, credit card companies are also predicting that Apple Pay's impact on the industry will be limited for the time being.

In the case of domestic credit card companies, the top five companies account for about 84 per cent of the total market.

Hyundai Card, which will introduce Apple Pay, has a market share of around 15 per cent.