An indigenous 'Apple Pay' is coming…It only needs a touch, no swiping, to pay

Gil Jae-sik Feb 16, 2015

The 'non-contact payment infrastructure' for swipeless payment will be introduced as early as the first half of this year.

The ‘non-contact payment infrastructure,’ which allows you to make payment without swiping the credit card by just touching the card terminal like the bus transportation card, will be supplied to card merchants around the country. Also, the so-called Korean-style ‘Apple Pay’ payment ststem, which makes it possible to make payment using the NFC function of the smartphone without the plastic credit card, will be introduced as early as the first half of this year.

According to financial industry insiders on February 15, KB Kookmin Card and NHN Entertainment decided to invest funds in excess of KRW100 billion to develop the non-contact NFC-based payment composite terminal and supply it to tens of thousands of card merchants around the country in the first half of 2015. Accordingly, it is forecast that the age of innovative FinTech card payment will come. Card users will only need to touch the terminal to make payment instead of ‘swiping’ the card.

This payment method is taking advantages of the NFC-based ‘PayOn’ technology that is quite popular abroad.

The PayOn service is the non-contact credit card payment service that was introduced by KB Kookmin Card, Shinhan Card and BC Card back in 2007. The RF chip in the post-paid transportation card is used to make payment without swiping the card through the payment terminal. This service makes it possible to make payment by putting the near field communication (NFC) module in the payment terminal or in the smartphone-smartphone mode.

It was adopted by some traditional markets and the delivery-related industry, but it was not widely used due to the weak infrastructure.

As NHN Entertainment decided to supply the payment terminal equipped with the PayOn function to its credit card merchants throughout the country, however, it seems that the NFC-based non-contact payment method will rapidly gain popularity.

“We are planning to build the infrastructure by adding the RF function to existing payment terminals so that non-contact online and offline payment will be possible,” said an industry insider who asked not to be named. “As a result, if you touch the plastic card with an RF chip to the terminal, payment will be made conveniently.” To this end, the two companies will commercialize NHN Entertainment’s payment platform ‘PAYCO’ first sometime next month, and link it to a payment terminal equipped with the PayOn function and thus diffuse the online and offline NFC-based payment infrastructure across the country.

Also, they finalized the detailed plan to link the mobile app card of KB Kookmin Card and enable online NFC payment as well. Their intention is to implement NFC-based app card in addition to the barcode payment method. In this case, it seems that payment cooperation with other card companies other than KB Kookmin Card, which launched mobile app cards, will be possible.

“If the non-contact payment infrastructure is reinforced utilizing the NFC technology both online and offline, a convenient touch-type payment method like the transportation card will be widely used,” said a KB Kookmin Card Insider. “Under-the-table cooperation with other companies will be materialized sooner or later.”