Eastar Jet recently rolled out its in-house simplified payment service, Starpay. (Image courtesy of Eastar Jet)
SEOUL, Jan. 2 (Korea Bizwire) – Low-cost carriers (LCCs) in the domestic aviation sector are garnering attention for their foray into proprietary simplified payment services. This move is in response to their growing user base and transaction volumes, increased competition for airline tickets, and a strategic initiative to foster customer loyalty through improved payment convenience.
Eastar Jet recently rolled out its in-house simplified payment service, Starpay. This service streamlines the payment process, allowing users to finalize transactions by entering a six-digit password. Users can register their debit or credit cards on the airline’s website or app to make use of this feature.
Similarly, Jin Air introduced its own simplified payment service, Jin Air Pay, last October. Jeju Air, another major LCC in South Korea, unveiled its ‘Quick Payment System’ in October 2021. T’way Air pioneered the concept in November 2019 with its service, T’way Pay, and Air Seoul introduced Mint Pay in December of the same year.
The impetus behind LCCs venturing into the simplified payment space stems from the rapid growth of the domestic simple payment market. As per data from the Bank of Korea, the first half of last year witnessed an average of 26.28 million daily transactions in simple payment services, with a total transaction value of 845.1 billion won.
This represents increases of 13.4% and 16.9%, respectively, compared to the same period a year earlier. When juxtaposed with figures from the first half of 2021 (18.21 million transactions and 559 billion won), there has been a remarkable surge in transaction volume and value of 44.3% and 51.2%, respectively.
By offering self-checkout services that enable passengers to swiftly pay with a simple password, airlines can enhance re-boarding rates. In-house payments, facilitated through the airline’s website or app, mitigate reliance on travel agents and other third-party payment services.
However, Korean Air and Asiana Airlines, the two major full service carriers in South Korea, currently have no plans to introduce their own simplified payment services. Korean Air boasts a dedicated payment system that stores Korean Air cards, issued by various financial institutions, to facilitate rapid payments.
On the other hand, Asiana Air provides access to seven external payment services, the highest among airlines.
An airline official noted, “LCCs, renowned for their competitive pricing on short-haul flights, are leveraging proprietary simplified payment services as a means to attract additional passengers.”
The official added that Korean Air and Asiana lack the incentive to develop their own systems, given the associated costs.
Kevin Lee (kevinlee@koreabizwire.com)
