On March 21, Apple Pay, the contactless payment technology for Apple devices, was launched in South Korea. It took nine years for Apple Pay to enter the Korean market after its first release in the United States on Oct. 10, 2014. As there has been high demand for simple mobile payments amongst Korean iPhone users, the introduction of Apple Pay is gaining great popularity.
Unlike Samsung Pay, which uses a magnetic method, Apple Pay has the advantage of fast payment using the Near Field Communication (NFC) method. However, the penetration rate of the NFC card readers takes up only 10 percent in Korea. As of now, Apple Pay has only one affiliated card company due to its exclusive contract with Hyundai Card, making it quite inconvenient for users.
Despite arguments on Apple Pay, the number of subscribers surpassed one million on the first day of its launch, attracting attention and popularity from the public.
“Compared to other countries, the number of Apple Pay subscribers is increasing quickly, which is a phenomenon caused by Korea’s technological foundation,” said Ryu Chang-won, the Executive Director of Business Strategy Research Division of Hana Institute of Finance. “Korean people have already been highly responsive to simple payment with Samsung Pay, and there has been continuous demand and interests toward Apple Pay.”
Unlike Japan, where Apple Pay was not widely activated due to the remaining commercialization of cash payment, and China, where Alipay and WeChatpay are dominant, Korean people are already familiar with mobile payment methods, so the conditions for each franchise to install the card readers were already in place.
Regarding the future prospects of the simple mobile payment market, Ryu predicted that the emergence of Apple Pay will proceed in the direction of increasing the size of the market itself.
About current concerns on the high commission rate, Ryu remarked that Apple Pay’s commission rate is relatively high because their goal is to generate solid profits through commission fees unlike Samsung, which aims to attract Samsung devices with Samsung Pay.
“The commission rate can be adjusted according to national guidelines,” Ryu assumed. “Since it will take a long time to adjust the commission rate, in the mid-to-long- term, each company will inevitably reduce benefits that customers cannot recognize.”
Apple Pay’s debut in South Korea has also drawn the attention of a number of university students. There are voices regarding the convenience of Apple Pay, while some individuals are not completely satisfied with the system.
Kim Da-rin, a junior from the Department of Sociology, started using Apple Pay right after its debut. She has been using Apple devices for a considerable amount of time, which naturally led her to take interest in Apple Pay before it was even introduced.
“When I saw people around me using Samsung Pay, my anticipation towards Apply Pay increased,” Kim stated. “I was drawn towards the convenience of paying money through my mobile phone, which led me to issue a Hyundai card as soon as Apple Pay was launched.”
Despite the convenience she expected, Kim felt the limitations of Apple Pay. Most of the owners of small enterprises around campus were not familiar with Apple Pay, which made customers use their credit cards. Even trained employees in department stores were unfamiliar with the process as it was their first time adapting such tool.
“The NFC method is advantageous as it is faster than magnetic payments, but more time is needed for it to make Apply Pay commercialized,” Kim said. “I do not think there is much reason to use Apple Pay unless the current inconveniences are resolved.”
Lee Eun-sung, a freshman from the Humanities, Arts, and Social Sciences Division (HASS) of Yonsei University, who uses Apple devices but does not utilize Apple Pay as her main payment method, thinks it is inefficient to issue a new card just for the purpose of activating Apple Pay.
“Since Apple Pay is an inconvenience for me due to the lack of technological infrastructure, I personally want to stick to the payment method I am well accustomed to, which is carrying my own card and cash,” Lee stated.
Cai Dongni, a freshman in the Department of Consumer Studies, and Liu Leyuan, a junior in the Division of Communication & Media, both students from China, explained that mobile payment methods have been actively utilized in the Chinese society for over 10 years.
Cai has lived in South Korea for over a year, but she has not used mobile payment methods. She uses her own cash or card and considers her life in China more convenient as most market transactions are possible with just mobile phones.
Unlike Cai, Liu is currently using Kakao Pay and indicated that she did not encounter much inconvenience and thought there was no distinct difference in terms of the characteristics of the two countries’ payment methods.
Apple Pay has surely brought convenience to the South Korean economy as well as Apple users. However, ongoing criticisms due to the limitations and inability to surpass Samsung Pay and other foreign mobile payment methods are present.