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| Customers line up to purchase Apple's iPhone 14 in front of an Apple Store in Seoul, Oct. 7, 2022. Yonhap |
Will Apply Pay cause upheaval in payment market?
By Lee Min-hyung
Shares of electronic payment and wireless communication service operators surged Monday on growing hopes for the launch of Apple Pay in Korea.
According to data from the Korea Exchange, KG Mobilians' share price soared by more than 20 percent soon after the opening of the stock market here. The company operates wired and wireless payment services. Its share price surged by as high as 22 percent at one time on Monday morning before closing with a gain of 13.24 percent. The firm's stock price has extended gains for three consecutive trading days since Feb. 2.
The rally came in reaction to the Financial Services Commission's latest decision to approve Apple to start its mobile payment service in Korea with local credit card firms.
Other stocks related to card payment terminals also enjoyed unexpected stock surges following the report. Shares of Korea Information & Communications Co. (KICC) increased more than 12 percent shortly after trading started on the same day. The company offers a diverse set of payment solutions for credit card firms and other payment-related service providers.
Apple Pay's much-anticipated arrival in the Korean stock market comes as a major challenge to Samsung Electronics which has by default dominated the mobile payment market here with Samsung Pay.
Apple Pay debuted overseas in September 2014, but failed to make inroads into the Korean market due to the nation's weak infrastructure for near-field communication (NFC) terminals. Most stores here use magnetic secure transmission (MST) terminals through which Samsung Pay is available.
As the industry estimates that less than 10 percent of credit card merchants here have NFC terminals, it will take more time for Apple Pay to become available nationwide. Apple Pay is expected to debut here as early as the beginning of March, after having received approvals from financial authorities.
But when NFC terminals come into wider use due to the Apple Pay effect, Samsung is feared to lose its market share to its archrival to some extent. According to data from StatCounter, Apple accounted for 33.31 percent of the smartphone market here in January, even if Samsung Electronics still outperforms Apple with a 61.95 percent market share.
Chances are some Samsung users may switch their devices to Apple following the official launch of Apple Pay here.
"Samsung users have long stuck to the Galaxy smartphone ecosystem for its versatility supporting various services ― such as mobile payments and phone call recording ― but Apple is moving to ease its users' long-awaited complaints on the lack of the payment service here," an industry source said. "Even if this will not result in any surprising changes in the local smartphone market share, the arrival of Apple Pay will pose a threat to Samsung."
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