Seoul, South Korea – The convenience of mobile payments is set to become even more competitive in South Korea as major credit card companies expand their adoption of Apple Pay. Following in the footsteps of Hyundai Card, Shinhan Card and KB Kookmin Card are gearing up to launch Apple Pay services as early as next month.
This rapid expansion of Apple Pay has put pressure on Samsung Pay, which has been offered to card companies for free. Industry experts predict that Samsung may soon introduce fees for its mobile payment service, mirroring Apple's revenue model.
The Growing Competition The influx of Apple Pay into the South Korean market is driven by the desire of credit card companies to capture a larger share of the overseas payment market and attract younger consumers. Hyundai Card, which was the first to introduce Apple Pay in South Korea in 2023, has seen a significant increase in its transaction volume.
The Looming Threat of Fees Apple Pay typically charges credit card companies a 0.15% fee per transaction. While Samsung Pay has refrained from charging fees since its launch in 2015, this policy may change as the competition intensifies.
Industry insiders believe that Samsung will likely introduce fees for Samsung Pay once its existing agreements with credit card companies expire in August. The expectation is that Samsung will follow suit with Apple Pay's fee structure, imposing a 0.15% charge on transactions.
Impact on Credit Card Companies The introduction of fees for both Apple Pay and Samsung Pay is expected to significantly impact the profitability of South Korean credit card companies. Analysts estimate that credit card companies could face an additional 70 billion won (approximately US$53 million) in annual fees if Samsung Pay adopts a 0.15% fee.
"If credit card companies have to pay fees for both Apple Pay and Samsung Pay, it will put a significant burden on their profitability," said a credit card industry official. "Ultimately, consumers may see a reduction in benefits as a result."
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