March 22, 2023
SEOUL – Global tech giant Apple kicked off its mobile payment service Apple Pay in Korea on Tuesday, with more than 170,000 iPhone users rushing for registration earlier in the day.
“We’re so thrilled to bring Apple Pay to our users here in Korea with Hyundai Card as our first issuer,” Duncan Olby, who is in charge of Apple’s digital wallet services outside America, said in a press conference held at the Hyundai Card Understage in Itaewon, central Seoul.
“Users can start paying with Apple Pay at convenient stores like CU or GS25, coffee spots like Paul Bassett, department stores like Lotte Department Store, or supermarkets like Costco or Homeplus,” he added.
During the conference, Olby also emphasized that Apple Pay values the security and privacy of its users as much as providing convenient service.
He further explained that Apple Pay will not collect information about what its users purchase, where the payment takes place and how much is paid.
“All that (payment) information is between you, the merchant and your bank,” he said.
Rumors of Apply Pay launching its Korean services had circulated for years.
In December last year, Korean financial authorities finished a review of Apple Pay’s terms and conditions, but additional reviews on issues related to compensating local retailers–for installing new near-field communication readers for Apple Pay–took much longer than expected as it could be subject to antitrust scrutiny.
During this additional review process, the problem was solved as Hyundai Card gave up its exclusive partnership with Apple Pay.
Finally, on Feb. 3, the financial regulator announced that local credit card firms can now introduce Apple Pay.
Hyundai Card Vice Chairman Chung Tae-young who also took part in the press conference on Tuesday said that he, too, has been longing to introduce the service in Korea.
“We could launch the service before North and South Korea’s reunification. We have been saying next month, next month for years,” Chung said jokingly.
Chung also said he believes that the expansion of NFC readers will bring changes to the Korean card industry.
“We will no longer have to wait in long lines in front of the cash register, and we won’t be asked to ‘try inserting card again.’” he said.
However, some industry insiders see that there are still hurdles to Apple Pay’s expansion here, as users currently cannot pay using the service at stores like Korea’s top franchise coffee chain Starbucks.
This is because the necessary payment infrastructure for Apple’s digital wallet services has not been widely installed yet. Ahead of the launch, among some 2.9 million stores, only around 70,000 are estimated to have NFC readers that work with Apple Pay, according to industry sources.
Users also cannot pay for public transportation with Apply Pay in Korea.
This lack of infrastructure for Apple’s digital wallet is also the main reason why rival Korean credit card issuers are still hesitant to adopt the service, the sources said.
What’s more, at present, almost 80 percent of smartphone users in Korea use Samsung or Android phones and iPhone users make up less than 20 percent.
Apple Pay made its debut in 2014 but its Korean launch has long been delayed. Over the years, its archrival Samsung Electronics’ mobile payment service Samsung Pay has enjoyed a near monopoly on its home turf.
Most recently, Samsung Pay also formed an alliance with two top local mobile payment providers — Kakao Pay and Naver Pay — to consolidate its dominant position in the country.
Meanwhile, some Apple Pay users are reportedly experiencing payment failures on its first day of release.
“There has been a sudden surge in customer influx, leading to some usage restrictions, and the issue is currently being addressed,” a Hyundai Card official told The Korea Herald on Tuesday.