[Inside Chodong] Hoping Consumers Will Win the "Pay War"

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Wallets are becoming increasingly unnecessary. These days, when going to the local mart, I only take a shopping bag and my smartphone. Even when getting on and off taxis, subways, or buses, there is no need to take out the wallet from the bag. In the past, the first thing to grab when leaving the house was the wallet, but now people take their smartphones instead. With the spread of credit cards, people have moved away from heavy and bulky wallets filled with coins and bills to carrying only slim and light card wallets, and now with the popularization of easy payments via smartphones, even card wallets have become unnecessary.

Recently, with the introduction of Apple Pay in Korea, the decline of wallets is expected to accelerate. iPhone users, who had been relatively marginalized amid Samsung Pay's dominance, are abandoning wallets and increasingly choosing Apple Pay. iPhone users who had eagerly awaited the introduction of Apple Pay, along with trend-sensitive younger generations, have rushed to use Apple Pay, successfully establishing its initial presence. The number of Apple Pay subscribers surpassed 2 million within three weeks of its launch. Thanks to the Apple Pay effect, Hyundai Card's new membership increased by more than 200,000 in March alone. Currently, Apple Pay can only be used in Korea through Hyundai Card.

One of Apple Pay's strengths is its payment speed. Apple Pay uses Near Field Communication (NFC) technology, allowing payments simply by bringing the device close to the terminal, with the perceived payment time being less than one second. Additionally, encrypted tokens are stored in the device's internal security chip, enabling use without an internet connection. Another advantage is that it can be used via the Apple Watch. Even when on a call or using the phone for other purposes, payments can be made just by bringing the Apple Watch close to the terminal.

The emergence of Apple Pay as a 'game changer' has triggered strategic alliances in the easy payment market. To respond to this powerful competitor, Samsung Pay and Naver Pay have joined forces. Through service integration, Naver Pay payments are now possible at offline merchants where Samsung Pay is accepted. Furthermore, Naver Pay offers point accumulation benefits when payments exceed a certain amount via Samsung Pay within its app. Considering Apple Pay's strength in overseas usage, Kakao Pay has focused on enhancing its overseas capabilities. Through partnerships with companies in Japan and China, it supports domestic users to conveniently use the service abroad.

Although Apple Pay has started off with great enthusiasm, many challenges remain to be addressed. Until now, NFC payment terminals, the technology Apple Pay uses, have not been widely deployed in Korea. About 120 brands have introduced dedicated terminals with the launch of Apple Pay domestically, but this is still far from sufficient. It also does not support transportation cards. The fact that there are more places where it cannot be used than where it can be is a critical weakness for Apple Pay. It is important to remember that users who initially approached the service out of curiosity and expectation may turn away once they start experiencing inconvenience. Rather than becoming complacent with its early success, Apple Pay must focus all efforts on improving user convenience.

Due to its speed and convenience, the easy payment market is rapidly growing every year. In this fast-growing market, service providers inevitably engage in fierce competition to secure market share. This competition among providers is positive from the consumer's perspective, as it broadens choices and increases available benefits. We hope that consumer convenience will be further enhanced amid the increasingly intense competition among payment services.

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