Apple and Hyundai Card have announced the upcoming launch of Apple Pay in South Korea on March 21, marking the tech giant’s latest move into the competitive mobile payment service market. The launch comes a month and a half after Apple first announced its plans in early February, following a review by the Financial Services Commission (FSC), the regulatory body overseeing financial institutions and products in South Korea.
Currently, only Hyundai Card users will be able to utilize Apple Pay in South Korea, as Hyundai Card gave up its exclusive right to use the service during the FSC review process, allowing other card companies to join the program. Once the service is released, Hyundai Card users will be able to register their domestically issued Hyundai Card on Apple devices such as the iPhone and Apple Watch and pay with Apple Pay without the need for a physical card.
Notably, Apple Pay is expected to be available at major convenience stores and department stores, including Lotte Mart, HomePlus, Costco, Ediya Coffee, Paul Bassett, and Twosome Place. However, Starbucks and stores affiliated with Shinsegae Group, such as E-Mart and Shinsegae Department Store, are reportedly not planning to support Apple Pay for the time being.
While the launch of Apple Pay is a significant milestone, the service is currently limited in Korea. One of the main challenges for Apple Pay to overcome is the diffusion of NFC (Near Field Communication) terminals, which are still only 5% penetrated. Moreover, it is essential to increase the number of partner credit cards while alleviating the burden of credit card processing fees for Apple Pay to succeed in the Korean market.
Despite these challenges, industry observers expect Apple Pay to become a strong competitor to Samsung Pay, which currently dominates the domestic payment service market in South Korea. It is worth noting that Apple Pay has already seen success in other international markets, such as the US and Japan.
The introduction of Apple Pay in South Korea is an important step for the mobile payment industry in the country. While there are challenges to overcome, the move is expected to bring greater convenience and options for consumers, and potentially shift the balance in a market long dominated by Samsung Pay.