Apple users in South Korea are excited about the long-awaited launch of Apple Pay – Apple’s smartphone payment service that is revving up to spark competition with Samsung Pay, Samsung Electronics’ nationwide service. After months of unconfirmed rumors about the launch, the South Korean Financial Services Commission finally confirmed Apple Pay’s entrance into the domestic market this month. Now that Apple Pay is set to enter the game, you may wonder what changes there would be in the near future. To clarify the topic, the Sungkyun Times (SKT) has pieced together an overview of what Apple Pay is, who it will be available for, how it can be used, and key differences with its major competitor Samsung Pay.
About Apple Pay
-What Is Apple Pay, and Where Can We Use It?
Apple Pay is a payment service that sees a collaboration between Apple Korea and Hyundai Card, a financial unit under the Hyundai Group. Hyundai Card announced on February 8th that the service would be launched in March, but the company is yet to reveal specific details. The service will use Near Field Communication (NFC) technology for contactless payments, which means NFC readers must be readily available in retailers. Currently, franchises of major conglomerates have already set up NFC terminals to introduce Apple Pay in their stores, including convenience stores, supermarkets, and coffee franchises. In the cases of smaller businesses that make less than ₩3 billion in average annual sales, additional support will be provided for the service installation in their stores.
-Who Can Use Apple Pay?
For now, the payment service is limited to iPhone users with a Hyundai card. The card company initially claimed exclusive use of Apple Pay in their contract for a whole year, which was a move to expand their share in the domestic credit card market. Nevertheless, the company had to give up its exclusive license as supplying NFC terminals in stores that signed up for Apple Pay because it was impossible to do so without violating related regulations. Apple’s partnership will likely extend to other credit card providers soon, though it may take some time for this to have an effect.
-What Are the Conditions for Use?
Apple Pay will only be available for credit and debit Hyundai cards that are accepted in Korea and overseas. In addition, the service will not yet include payment for public transportation such as bus or subway fares in Korea. Rumors say this option is still in the review process, so make sure to keep an eye out for updates – transit cards may soon be added to the Wallet application for Apple Pay.
Apple Pay VS. Samsung Pay
-How Does Apple Pay Compare to Samsung Pay?
Before explaining how the two services differ, we must acknowledge that Apple and Samsung have one thing in common: they both use contactless payment methods. The user must hold a security token, in this case, a smartphone with a digital wallet application, against an electronic card reader to trigger a wireless financial transaction. Such an aspect makes it convenient for customers to pay without reaching for their physical wallets to pull out a card. However, the technology that Apple and Samsung each opt for differs notably. While Apple Pay only supports the NFC method, Samsung Pay supports both the NFC and the Magnetic Secure Transmission (MST) method. NFC technology works by exchanging information written on the chip of an electronic device. In contrast, MST uses the more traditional method of reading the built-in information inside the magnetic strip on credit cards. Therefore, Samsung Pay makes contactless payment possible even on older versions of card readers, which secures wider use. This may be viewed as an obstacle to Apple Pay’s launch in Korea, but it is unlikely to stand as a big hindrance to the growing popularity of NFC technology worldwide thanks to its speed and security.
-The Encounter of Two Rivals in the K-Mobile Financial Sphere
Samsung and Apple are already butting heads in Korea’s mobile finance market as intense rivals battling within a monopoly system. Samsung Pay has enjoyed its dominant position for years, but Apple Pay now poses a threat with its planned debut in March. In response, Samsung Pay recently announced its partnership with another rival, Naver Pay, to further expand its online and offline system. Although Samsung has kept the loyalty of its users by opening a mobile payments service that is both simple and useful, it is difficult to predict the scale of the impact that younger consumers will have since this demographic tends to lean more towards Apple products. Experts are eyeing how this scene will play out through social media platforms such as Instagram and TikTok. For users like us, it will be interesting to see how the introduction of diverse payment methods will play out. Will Apple Pay live up to the hype, or will it fall short of Samsung’s tight grip on the market? Only time will tell.