A customer pays with Apple Pay at a convenience store in Seoul on March 21, 2023. (Yonhap)
SEOUL, March 27 (Korea Bizwire) — Apple Pay, the near field communication (NFC) payment service offered by U.S. tech giant Apple Inc., saw over 1 million registrations (based on token issuance) within a day of its launch.
However, the impact of Apple Pay in the market is likely to be limited due to certain factors.
The speed of compatible terminals is a significant factor that affects the market impact of Apple Pay.
Although there are reports of stores equipping themselves with NFC terminals and completing software updates to meet the growing demand, the pace of terminal penetration may not be as fast as expected, as seen with both Naver Pay and Kakao Pay.
Apple Pay is significant because it breaks down the barriers between online and offline payments. However, the user experience needs to improve for innovative services to spread.
Apple’s card issuing partner in South Korea, Hyundai Card Co., cannot actively promote the service due to Apple’s “secretive” corporate culture.
If Apple signs a deal with a company, it will control the promotion and marketing of the product and prevent information leaks.
Hyundai Card has only issued one official press release about Apple Pay since September last year when it was first announced, due to contractual confidentiality clauses, according to industry observers.
Hyundai Card has done all the necessary work, such as installing NFC terminals and visiting affiliated companies, to introduce Apple Pay, but it is limited to promoting it due to the penalties associated with leaking information.
This is because Apple is one of the most sensitive companies to information leaks, and its partners have had contractual friction with the company in the past.
“A payment service needs to be easily recognizable for users to adopt it. However, due to the rebate controversy, merchants may be reluctant to bear the replacement cost voluntarily, which will slow down the adoption rate,” an industry insider said.
A report by Kim So-hye, a researcher at Hanwha Investment & Securities Co., suggests that the impact of Apple Pay’s domestic service on existing payment services will be limited.
She cites Samsung Pay’s 24 percent market share as a factor in the competition.
Kevin Lee (kevinlee@koreabizwire.com)
