Electronic Payment Gateway Service Usage Increases 29.5% Due to COVID-19 Impact... Record High

Rapid Increase in Use of Mobile Payment and Remittance Services

[Asia Economy Reporter Seo So-jeong] Last year, due to the impact of COVID-19, non-face-to-face online transactions expanded, resulting in the average daily usage of electronic payment gateway (PG) and prepaid electronic payment services soaring nearly 30% compared to the previous year, marking an all-time high.

According to the "2021 Mid-Year Electronic Payment Service Usage Status" announced by the Bank of Korea on the 23rd, the usage performance of electronic payment gateway services provided by electronic financial operators and financial companies last year was 21.72 million transactions and 904.8 billion KRW, increasing by 29.5% and 28% respectively compared to the previous year.

The electronic payment gateway service is a service that transmits and receives payment information or mediates and settles the payment so that the payment from the buyer in e-commerce can be ultimately paid to the seller.

The average daily usage of prepaid electronic payment services also increased by 27.7% and 42.2% compared to the previous year, reaching 23.8 million transactions and 664.7 billion KRW respectively. The prepaid electronic payment service issues and manages prepaid funds that can be used to pay transportation fees, commercial transaction payments, or remittances in advance.

The Bank of Korea stated, "In the case of prepaid electronic payment means, electronic financial operators have been steadily increasing usage performance of simple payment and simple remittance by offering discounts on goods and service purchase payments, point accumulation, and prize provision."

In particular, as financial transactions using mobile devices were preferred last year, the use of simple payment services such as KakaoPay expanded significantly.

Simple payment services use simple authentication methods such as passwords and fingerprints, recording an average daily usage of 19.81 million transactions and 606.5 billion KRW, increasing by 36.3% and 35% respectively compared to the previous year.

Simple remittance services such as Toss recorded 4.33 million transactions and 504.5 billion KRW, surging by 33% and 41.5% compared to the previous year. The Bank of Korea explained, "The number of simple remittance service usages by financial companies has greatly expanded compared to the previous year due to the spread of youth prepaid card issuance services based on the balance of simple remittance services."

The average daily usage of payment escrow services was 3.19 million transactions and 151.5 billion KRW, increasing by 23.7% and 26.7% respectively compared to the previous year. The payment escrow service is a service that receives payment from the buyer in e-commerce, verifies whether the transaction was properly conducted through the confirmation process of receiving goods, and then pays the purchase amount to the seller.

The average daily usage of electronic billing and payment services, which issue bills such as apartment management fees and electricity/gas charges via email and directly collect and settle payments, was 220,000 transactions and 38.9 billion KRW, increasing by 12.2% and 10.2% respectively compared to the previous year.

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