"Payment Without Card Company Distinction in One App"… OpenPay Realization Expected as Early as First Half of the Year (Comprehensive)

Specification for Interoperability Developed Last November
Self-Help Measure to Enhance Platform Competitiveness Against Big Tech
Attention on Whether All Card Companies Will Participate

[Asia Economy Reporter Ki Ha-young] As early as the first half of this year, it will be possible to register and use credit and debit cards from multiple card companies within a single application (app). This is a self-help measure by card companies to respond to big tech companies (large information technology companies) that are expanding their influence in the simple payment market. However, since each card company has different interests, it is expected that it will take some time to see whether all companies will participate in the future.

According to the card industry on the 7th, commercialization of Open Pay, which allows registration and use of cards from multiple card companies in one app, is scheduled to be promoted with the goal of the first half of this year. Currently, Shinhan, KB Kookmin, Lotte, Hana, and BC Card are reportedly reviewing it positively.

Earlier, in November last year, card companies developed interconnection standards and standard APIs for mutual interoperability registration between card companies. The main point was to create standards that open each card company's pay app to other card companies, allowing multiple companies' cards to be registered and used in one app. For example, a system was built that allows KB Kookmin Card to be registered and paid through the Shinhan Card app. From the customer's perspective, convenience is enhanced as they can pay with multiple cards using only one app without having to install individual card company apps one by one.

Big Tech Expanding Influence in Simple Payments... Platform Competitiveness is the Answer

This decision aims to increase platform versatility and prevent losing leadership to big tech in the growing simple payment market. Naver, Kakao Pay, and others allow convenient payments not only through all card companies but also through various payment methods such as account linkage and charging.

According to the Bank of Korea, as of the first half of last year, the average daily usage amount of simple payments by electronic financial operators such as Naver Pay and Kakao Pay was 276.2 billion KRW, a sharp increase of 57.3% compared to the previous year. Financial companies recorded 159.1 billion KRW, a 25% increase from the previous year, but this did not match the growth rate of electronic financial operators. Amid the rapid growth of the simple payment market due to the increase in non-face-to-face payments caused by COVID-19, the influence of big tech is expanding.

To respond to big tech, the five major domestic financial groups have already started building an integrated payment platform. Although it is currently a group-integrated platform, the ultimate goal is to grow into an open platform that other financial company customers can also use.

Card companies also agree on the need to strengthen their own platform competitiveness against big tech, but it remains to be seen whether all card companies will participate in the actual commercialization of Open Pay. If multiple card payments are possible in one app, competition to secure customers among card companies may intensify even before big tech. There are concerns that once Open Pay is commercialized, customers may flock to large card companies.

An industry official said, "To counter the rapidly growing big tech in the payment market, synergy will occur only if all card companies participate in the Open Pay platform," but added, "Since there is no precedent and it is directly related to profits such as customer acquisition, each card company is carefully reviewing whether to participate."

This content was produced with the assistance of AI translation services.