November 28, 2024

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Samsung Pay (Samsung Electronics)

In an apparent move to counter Apple Pay’s long-awaited debut this month, Samsung Pay is seeking a stronger alliance with local mobile payment providers to consolidate its digital payment service's dominant position at home.

Samsung Electronics has been in discussion with Kakao’s payment leg Kakao Pay over a potential partnership deal, seeking business synergy between the two popular payment services, according to industry sources on Monday.

If the service integration is realized, it is expected to provide digital payments more conveniently for Samsung Pay users, the sources said. With the two mobile payment providers' cooperation in payment and digital wallet services, Samsung Pay users would likely be able to make transactions via the Kakao Pay app using magnetic secure transmission, a key technology behind Samsung’s offline mobile payment service.

Last month Samsung signed a partnership agreement with Naver Financial to promote its mobile payment service to gain a stronger online presence here through the network of Naver Pay, the country’s No. 1 online payment provider. It was the first time for Samsung Pay to join hands with a financial company other than Samsung Card.

Under the latest partnership deal, a whopping 31.5 million Naver Pay members can make payments with their smartphone at any store that accepts credit card payments, using the MST system. Likewise, Samsung Pay users can make transactions with at over 550,000 Naver Pay-affiliated online stores.

Market watchers believe that Samsung’s active moves to strengthen its strategic partnership with local mobile payment providers is to keep Apple Pay's potential growth in the payment market here in check, while Apple Pay, in partnership with Hyundai Card, is forecast to belatedly kick off its Korean operation later this month.

Samsung Pay was the country’s top offline mobile payment provider with a market share of 23.5 percent in the first half of last year in terms of users’ transactions. It also accounted for about 80 percent of all offline digital payment transactions. However, Apple Pay has been the most used payment solution globally, with Samsung Pay a distant third.

Local industry circles are paying keen attention to whether Samsung will keep its position as a dominant player even after the launch of Apple Pay. While both card companies and retailers here have started preparations for the introduction of Apple Pay, the global tech giant’s mobile payment service may pose a threat to Samsung if it provides the same level of service in Korea as it does overseas.

Samsung is remaining mum over a potential partnership with Kakao. A Kakao Pay official said it is "in discussion with Samsung on the matter," but "nothing has been decided yet."

By Jie Ye-eun (yeeun@heraldcorp.com)