’s Android Pay to Be Commercialized in South Korea in February of 2017

’s mobile wallet platform called Android Pay is going to be commercialized in South Korea in February of next year. Industries are focused on whether nor NFC-based (Near Field Communication) payment services can be expanded before Apple Pay is expanded and they are also expecting competitions between Android Pay and Samsung Pay that is based on MST (Magnetic Secure Transmission).

According to financial industries and IT industries on the 5th, South Korea’s credit card companies, , and a global financial service provider called Visa have agreed to commercialize Android Pay in South Korea in February and are working to link Android Pay to variety of credit cards.

Previous to this agreement, organized a partnership with global financial service providers such as Visa and MasterCard and pushed for partnership with South Korea’s credit card companies.

In order to use Android Pay at stores in South Korea starting from February, and credit card companies have agreed to increase number of terminals with NFC function and specialize in mobile payments.

Android Pay is similar to Apple Pay.

Android Pay is a payment proxy service that uses fingerprint recognition function and allows simple method of payments. Beside of fingerprint recognition function, it also has previous methods such as inputting passwords. Most important thing is that one does not have to individually input IDs and passwords to many shopping malls and make payments after logging in.

Application for Android Pay can be used through Smartphones that have NFC function and OS (Operating System) that is over Android KitKat 4.4 and this makes many Smartphones in South Korea to use Android Pay. If Visa’s checkout or MasterCard’s Masterpass are linked to Android Pay, one can make payments through foreign online websites.

is also thinking about installing a hands-free function to Android Pay. If this function, which utilizes beacons and others, is linked, consumers can make payments without pulling out their phones.

Many South Korean credit card companies such as KB, Hyundai and Lotte are joining Android Pay’s camp to commercialize Android Pay in South Korea.

“We are carrying out all work that is necessary to commercialize Android Pay in February along with and Visa.” said a high-ranking official for a South Korean credit card company. “However expansion of payment terminals that have NFC function will be the problem.” This representative also added by saying that major credit card companies are searching for a way to install comprehensive terminals at retail stores.” 

Views on commercialization of ’s mobile wallet platform differ from one another. Some believe that if starts its service I South Korea where many Smartphones are based on Android, markets that have been occupied by variety of mobile wallet platforms can be all brought in at the same time. Although Samsung Pay is being used globally, there are limited numbers of Smartphones that can use Samsung Pay. On the other hand, Smartphones with Android KitKat or above can use ’s Android Pay. This indicates that many Smartphones are able to use Android Pay regardless of their brands.

On the other hand, significant time is needed for Android Pay to be regularized in South Korea since there is lack of infrastructures and devices that can support NFC are still needed. 

In order to make Android Pay work, global technical standard called EMV that is established by 3 global financial service providers such as Visa and MasterCard needs to be in place. Because NFC function is missing from IC (Integrated Circuit) payment terminals that are currently being pushed ahead by financial authorities, there are concerns about duplicate investments.

Although The Credit Finance Association created a fund worth $85.6 million (100 billion KRW) and tried to supply terminals by selecting 3 suppliers, level of frustration for credit card companies is growing as these terminals do not support NFC function.

“Currently there are terminals that can support magnetic, IC, and NFC in markets.” said a representative for a credit card company that is working with . “Because there is a chance of violating Specialized Credit Financial Business Act if credit card companies install these terminals by themselves, we are currently trying to persuade large retail stores.”

“Although we cannot disclose exact date of commercialization, it is true that we are making discussions in order to have terminals that support Android Pay through EMV standard.” said a representative for Visa.

Staff Reporter Gil, Jaeshik | [email protected]