Apple's digital payment service betrays fans' wish to skip S. Korea

By Park Sae-jin Posted : August 2, 2017, 14:05 Updated : August 2, 2017, 14:34

[Courtesy of Apple]



South Korea is well known for explosive growth in its mobile digital payment market, but American tech giant Apple left it out of its digital wallet service, disappointing many iPhone users.

Apple has added the United Arab Emirates, Finland, Denmark and Sweden to a list of countries where Apple Pay is available. Currently, the tech giant provides its digital wallet service to 21 countries including Japan and China, not South Korea where iPhones take up about 25 percent of the smartphone market.

The value of South Korea's digital payment market is forecast to reach about 22.8 billion US dollars in 2021, compared to 874 million dollars in 2015, according to Statista, a digital market researcher. Apple is set to open its first official retail store in Seoul next year.

"Apple may think South Korea's mobile payment market is not attractive," a South Korean bank analyst told Aju News on condition of anonymity, pointing to a small population of iPhone users. Many cash registers and POS (point of sale) systems installed in stores are not suitable for Apple's digital wallet system as they do not support Apple's Near field Communication used to send and receive transaction data.

"Government regulations and organized movements by local banking services to hinder the entry of new rivals are seen as an obstacle Apple must overcome before launching its service," the analyst said. 

Compared to iPhone users left with a limited choice of mobile payments which only allow easy transaction and payments through apps and web services, Android smartphones provide digital wallet services for use online and at offline stores. Web service giants Kakao and Naver are also ready to expand their digital wallet services to offline stores. 
 
Kakao plans to link its service with Alipay, China's largest mobile payment system, for Chinese visitors at about 30,000 member stores in South Korea. Naver considers supporting offline payments with its digital wallet. Credit card firms such as KB Kookmin, Shinhan, Lotte and Hyundai seek to develop a compatible NFC dongle.

 
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