Mobile Payments (M-Payments) are Gaining Prominence in South Korea

Date: 2015-09-01

“• Mobile payments (m-payments) are gaining prominence in South Korea, with banks, non-banks and telecoms companies competing with each other to gain market share. Banks such as Kookmin Bank, Hana Bank and Shinhan Bank have offered m-payment services since 2012, and non-banks such as Naver and Daum Kakao launched m-payment services in the ensuing years. To capitalize on this trend, Samsung is planning to launch its m-payment Samsung Pay in South Korea in the second half of 2015, creating competition in m-payments.

• The South Korean banking industry will block the use of magnetic stripe plastic cards in all of the country’s 125,888 ATMs from May 2015. Announcing the policy, Financial Supervisory Service (FSS) cited the need for enhanced security and fraud prevention at ATMs. The shift to a chip-card-only policy began in March 2015, following successful trials of chip cards for cash advances and credit card loans at ATMs.

• An increase in household debt prompted the South Korean government to introduce measures to discourage credit card spending. The Financial Services Commission (FSC) increased the daily purchase limit on debit card use from US$2,847 (KRW3 million) to US$5,659 (KRW6 million) from January 2014. The move promoted more frequent use of debit cards at POS terminals, driving transaction values.”

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