Apple Pay is set to launch in South Korea in the coming months, putting a challenge to Samsung Electronics' hold of the mobile payments market in the region, Nikkei Asia reports.
Hyundai Card, Apple's local partner, made the announcement on Wednesday, Feb. 8, and said it was looking forward to partnering with Apple to bring Apple Pay to the South Korean market. As per Nikkei, Apple provided a similar statement and stated that additional details would be made available in the upcoming months.
Mobile Payments Market
South Korea's digital payments market is not particularly diverse, with only a few major players dominating the market. According to Statista, the total transaction value in Korea's digital payments segment is expected to reach US$190.40 billion in 2023, with an annual growth rate of 5.19%, for a total amount of US$233.10 billion by 2027.
Large non-bank technology companies like Kakao, Naver, Toss, and Samsung Electronics, which introduced their services in 2014 and 2015, occupy the mobile payment market in South Korea. The most popular services right now are Kakao Pay and Naver Pay, whose popularity is largely a result of how easy they are to use.
Apple Pay South Korea Launch
Nikkei reports that the introduction of Apple Pay in South Korea follows the Financial Services Commission's approval that credit card companies are free to launch their service there as long as they do not impose any fees on customers or merchants.
Other foreign payment services may conduct business in the country provided they abide by the regulations, according to the Korean financial watchdog.
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Due to fierce competition with local players vying for a relatively small but important market, foreign financial firms and services have had a difficult time gaining access to South Korea's domestic market over the years.
The dominance of Samsung Pay, the payment service provided by Samsung Electronics, the largest company in the country, could be challenged by the entry of Apple Pay in South Korea.
According to currently available data, Samsung Pay holds a market share of approximately 80% in the country's mobile payment market, largely as a result of the company's Galaxy smartphones.
It's possible that Apple Pay will make Samsung Pay less popular now that iPhone users in South Korea will be able to use it. AjuDaily says that about 54 million smartphones have been registered in South Korea and that about 30% of those are iPhones.
Apple Pay is already available in Australia, New Zealand, China, Hong Kong, Macao, Japan, Malaysia, Singapore, and Taiwan. South Korea is the tenth country or region in the Asia-Pacific region to get access to the service.
Apple Pay
Apple Pay provides a simple, secure, and private method of payment on iPhone, iPad, Apple Watch, and Mac.
Apple Pay is accepted wherever these symbols and marks appear in stores, apps, and on the web in Safari. Users in select countries and regions can add credit, debit, or prepaid cards from participating banks and card issuers.
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